China to ease curbs on foreign business in finance, autos

US President Donald Trump and China's President Xi Jinping attend at a state dinner at the Great Hall of the People in Beijing on Thursday. (Thomas Peter/Pool Photo via AP)

BEIJING: China will ease restrictions on foreign ownership stakes in the financial sector and reduce tariffs on automotive imports, a senior Chinese official said Friday, following criticism from the US and other trading partners.

Vice Finance Minister Zhu Guangyao said at a briefing following a state visit to China by President Donald Trump that China will lift limits on foreign ownership stakes in securities, fund managers and futures companies from 49% to 51% and end restrictions after three years, Mr Zhu said.

China would similarly raise such limits in insurance companies and eliminate curbs after five years, he added.

"In other words, foreign owners can have full ownership of such companies'' after three to five years, Zhu told reporters.

The moves appeared aimed at addressing mounting foreign complaints about China's trade surpluses and market barriers.

China will also "abolish'' limits on foreign ownership stakes in banks, Mr Zhu said, though he did not say when the move would take effect. Until now a single foreign investor could own no more than 20% of one bank, and a bank could have no more than 25% total foreign ownership.

Beijing will also gradually reduce tariffs on automotive imports, Mr Zhu said, without providing details.

"This opening up is decisive and the effect will be far-reaching,'' Mr Zhu told reporters.

Mr Trump has made narrowing the US trade deficit with China -- $347 billion last year -- a priority. US Commerce Secretary Wilbur Ross said that was a "central focus" of Mr Trump's talks with President Xi Jinping.

Prior to Mr Trump's visit, the American Chamber of Commerce had expressed concern the president's focus on trade in goods might mean he paid pays less attention to equally important issues such as complaints about restrictions on access to finance, health care and other industries in China's state-dominated economy.

During Mr Trump's visit, Chinese and American companies signed a series of multi-billion-dollar business agreements in a tradition aimed at blunting criticism of Beijing's trade policies.

Commerce Minister Zhong Shan said agreements signed Thursday at a ceremony attended by Mr Trump and Mr Xi totalled $253.4 billion, though many were memoranda of understanding or other arrangements that were less than firm contracts. Commercial sales announced appeared to total about $65 billion, many involving goods Chinese companies routinely buy.

Such contract signings are a fixture of visits to Beijing by foreign leaders and are meant to defuse foreign complaints about China's trade surpluses and market barriers. They often represent purchases already made by Chinese mobile phone makers, airlines and other customers that are collected for the visit, which means they have little effect on the trade balance.

The contracts give Mr Trump the opportunity to claim a rare political win following a first year in office marked by little legislative progress on health care and taxes.

China's trade surplus with the US in October widened by 12.2% from a year earlier to $26.6 billion. The total surplus with the US for the first 10 months of the year rose to $223 billion.