Following a two-day summit meeting in Washington between top U.S. and Chinese government officials, China said in a formal post-meeting joint statement that it was “committed to continue and extend financial sector reform” internally.
As part of that commitment, China said it would allow U.S. and other foreign banks incorporated in China to sell mutual funds in the country and confirmed that “there are no barriers to foreign banks to sell other types of wealth management products” to Chinese consumers.
The headlines from the meeting focused on human rights and the Chinese agreeing to move toward, in the statement’s words, “market-determined interest rates,” But if the Chinese market was truly opened up to U.S. mutual funds, it would constitute a major market opportunity for American asset management firms. As with many other American firms in multiple industries, China is viewed as a major new market, with a growing middle class that appears to be interested in all manner of consumer products.
In addition, China said it was already moving forward to allow foreign banks to underwrite corporate bonds; following the release in April of Chinese regulators’ unveiling of criteria for underwriters, the statement says “many” U.S. and other foreign underwriters filed applications to serve as underwriters.
The agreement said that these and other moves would “help level the playing field with China’s SOEs [state-owned enterprises] … and create opportunities for private enterprises – including American firms – across a broad range of service sectors.” Among those sectors is insurance, specifically third-party liability insurance. China said it would “advance toward allowing” U.S. and other foreign insurers to sell such policies to Chinese consumers in what the statement said was now “the world’s largest market for automobiles.”