China’s Financial Industry in 2020

China has the second-largest economy in the world after the U.S. Moreover; it is the most populous country in the world. As a result, it has a lucrative market practically in every industry, and the financial industry is not an exception. Starting in 2020, foreign companies will have a unique opportunity to invest in this industry.

China plans to open the $45 trillion financial market to foreigners. Thus, famous companies such as Goldman Sachs Inc, JPMorgan Chase & Co, as well as other companies, will be able to expand their businesses in China.

In 2020, foreign companies will be able to benefit from the decision to open the local market. Communist Party decided to open the insurance and future markets. However, other markets will follow suit in the future.

The financial industry and foreign companies

China’s decision to open its financial sector will have a huge impact not only on the local market but around the world as well.  It made this decision, as regulators and government are confident in the local companies that they compete with foreign entities.

Thanks to the decision, foreign firms will invest in the local market. This will help to rejuvenate the industry as local companies will have to adapt to the new reality.

According to the information, foreign companies may invest at least 7 trillion yuan or $1 trillion of assets onshore in the next couple of years. Moreover, this is a unique opportunity for global companies to gain from the local market.

For example, only in the commercial banking and securities sectors, it is possible to receive a part of $9 billion in annual profits by 2030.

Starting from 2020, overseas companies will be allowed to create their entities to trade futures. Currently, foreign companies have a limited presence in China’s futures market. For example, JPMorgan owns 49% of a joint venture. The UBS Group AG controls a futures subsidiary through its onshore securities outfit.