HSBC executive Peter Wong is calling for China to relax regulations so that foreign banks can have an easier time obtaining licenses and raising deposits in the country.
Wong, the deputy chairman and chief executive of HSBC’s Asia Pacific operations, added that China also needs to boost corporate governance and investor protection to prevent financial instability.
“We really don’t want to have another situation … similar to the Lehman crisis in China,” Wong said at the financial summit in Shanghai, according to Reuters.
Just last week, the Chinese government announced that it will allow foreign firms that are not in the investment business to invest in domestic companies in an attempt to improve cross-border investment and trade, as well as bring in more foreign capital. Economic growth in China is at a near-30-year low in the third quarter as its trade war with the United States has affected factory production.
To try to boost its economy, Beijing vowed last month that its financial markets would stay open and foreign investment would be welcomed despite the U.S. President Donald Trump administration reportedly considering the potential blocking of all Chinese investments.
“Chinese efforts to enhance reform and opening will be slowed down in the short term, but it will never be stopped,” Liao Qun, Hong Kong-based chief economist with China Citic Bank International Ltd., said last month. “China could explore European, Southeast Asian and the Belt and Road markets in lieu of the U.S.”
But Wong said he believes additional regulations need to be eased, such as allowing HSBC to expand its insurance business into new cities and provinces in China. In addition, Wong noted that “it’s very difficult for foreign banks to get deposits in China” due to strict requirements.
“We’ve been trying for a number of years,” he said. “Now we’re developing, we’re increasing our share, but the journey is not easy.”
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