New opportunities for China’s financial opening up From Mckinsey

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The following is the New opportunities for China’s financial opening up From Mckinsey recommended by recordtrend.com. And this article belongs to the classification: research report, financial technology, Mckinsey .

In the past 20 years, China’s financial market has developed rapidly. From the perspective of business scale and growth, China’s financial market has performed very well in the global market. After China’s accession to the WTO in 2001, China’s financial market has ushered in the first round of opening up. The main line of the first round of opening up is the wholly-owned corporate banks, insurance and non controlling joint ventures of non bank financial institutions. With the market accumulation of the previous round of opening up, the latest round of opening has aroused the keen attention of the financial circles at home and abroad, “further opening” has become a high-frequency vocabulary of China’s financial market. Opening up is generally divided into two categories: the first is the opening of financial services, including the opening of financial licenses and business access; the second is the opening of financial capital account. This paper will focus on the opening of financial license and business access.

Since the governor of the people’s Bank of China Yi Gang announced at the Boao Forum for Asia in 2018 to expand the opening up of the financial industry, a new round of opening-up measures have been accelerated. This round of financial opening-up is not only to fulfill China’s commitment to WTO, but also an active choice for China to promote structural reform of its financial system. It is expected to support the high-quality development of China’s economy and the transformation and upgrading of its financial system. In addition to scale and growth, structural changes in China’s financial sector have become another important factor in attracting foreign investors. With the transformation of China’s economy from high-speed growth to high-quality development, supply side reform, prevention and resolution of systemic risks, support of the real economy and Realization of high-quality development have become the key issues of the financial industry. The major financial industries have started unprecedented structural reform, and a series of representative regulatory measures such as new asset management regulations and IPO registration system reform are gradually implemented. Foreign institutions are also paying close attention to the new opportunities contained in these structural changes and how to win market share in these structural changes. Under the guidance of the idea of reform promoting opening up, the new round of opening up will further promote the deepening reform of China’s financial industry and promote the industry to move towards the road of high-quality development.

Looking back on history and looking forward to the future, we have the following four insights into the new round of opening up of China’s financial industry (Fig. 1)

Compared with the opening up after China’s accession to the WTO in 2001, this round of financial opening, which started in 2018, has surpassed the previous round in terms of the breadth of financial license opening, the depth of business qualification opening, and the speed of opening up.

The world has reached a consensus on the status and growth prospects of China’s financial market. The structural change of China’s financial industry has become a key factor to attract the world’s leading financial institutions.

How to achieve lasting and stable success in China’s market is the focus of foreign investment in the new round of financial opening.

The further opening of the financial industry to the outside world is of great value to the top-level design of China’s financial system, the high-quality development of the industry and the construction of institutional capacity.

“Promoting opening up with reform and promoting reform with opening up”. In the process of transformation, we believe that Chinese funded financial institutions should grasp four key points:

1、 The financial industry should return to the source, take the customer as the center, serve the customers well, do the customer management well, and vigorously develop the light capital mode. 2、 Risk and compliance are the core competitiveness and can create value. Many financial institutions have profound experience and lessons in this respect. 3、 Product innovation and technology empowerment must really mention the strategic agenda and change from slogan to action.

4、 We should have a refined, professional, agile, collaborative management and differentiated development model.

Different from the last financial opening-up, in the past few years, domestic institutions have become more and more rational in terms of culture, respect and tolerance for foreign investment in cooperation with international financial institutions, forming a virtuous circle. This has laid a good beginning for this round of opening up. Both sides can learn from each other’s strengths to achieve a win-win situation and promote the prosperity and development of China’s financial market!

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