President Xi Jinping is seeking to cushion the world’s No. 2 economy against the steepest slowdown since the early 1990s
China’s big bang opening of its $45 trillion financial industry begins in earnest next year — a step-by-step affair that’s unfolding just as economic strains threaten the promised windfall luring in global firms.
Starting with its insurance and futures markets, the Communist Party ruled nation will enact the most sweeping changes in decades to allow the likes of Goldman Sachs Group Inc., JPMorgan Chase & Co. and BlackRock Inc. to expand their footprint in China and compete for a slice of its growing wealth.
President Xi Jinping is seeking to cushion the world’s No. 2 economy against the steepest slowdown since the early 1990s after a crackdown on risky lending squeezed corporate funding and a trade dispute with the U.S. hit exports. Not only will foreign firms bring with them fresh capital, policy makers expect they will force entrenched domestic players to sharpen their operations and become more responsive to the market.
China is at a stage where regulators and the government are comfortable that local business can handle the threat of foreign competition, according to Paul Schulte, Singapore-based founder of Schulte Research and former head of Asia strategy for Nomura Holdings Inc. Firms like Goldman and JPMorgan “are looking to expand, merge, buy, grow in the next cycle — not this one.”
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