Huang Yiping, a member of a member of the People’s Bank of China’s monetary policy committee, said over the weekend that while China’s financial services market should be open to more foreign competition, China should take a cautious approach to doing that.
During a forum covered by Reuters, Yiping said there should also be a process to control the risks of opening up the financial sector in the country. “I think our financial services market should open further. But we should be more cautious with the capital account, with capital flows,” said Huang.
According to the report, China has already vowed to reduce or remove challenges for foreign firms entering the Chinese financial market, with the U.S. urging for more access as part of the trade negotiations. While China has vowed to open it up further, it has been moving cautiously due to worries that capital outflows could increase, hurting the value of the yuan.
During the same forum, Reuters quoted the head of Beijing’s financial office, Huo Xuewen, as saying that China needs more competition from financial companies outside of the country to strengthen its FinTech sector.
In a sign of China’s move to enable more foreign access to its financial markets, in late April American Express passed a major hurdle in efforts to become the first U.S.-based credit network to offer services in mainland China. The Chinese central bank formally accepted American Express’ application to clear and settle domestic bank card transactions, The Wall Street Journal reported at the time. The New York-based credit card company applied as part of a venture with the China mobile payment provider Lianlian Group.
China has about 6.7 billion bank cards in circulation, with government-owned UnionPay dominating the market at 90 percent market share, according to The WSJ.