I. Commitments on opening up the banking sector
According to relevant agreements of the WTO, China will gradually remove restrictions on such aspects as the foreign currency business, local currency business and licensing of foreign banks, and fulfill the following commitments:
1. Commitments on the licensing of foreign banks
(1) Expanding the scope of foreign exchange business of foreign banks
Upon formal accession, the restriction as to clients of foreign exchange services provided by foreign banks will be removed. Foreign banks may immediately provide the full range of foreign exchange services to Chinese enterprises and Chinese residents without need for case-by-case approval.
Upon formal accession, foreign banks will be immediately allowed to add foreign currency exchange, interbank lending, issuance of foreign exchange credit cards, issuance of foreign credit cards as agents and other business on the basis of existing business scope.
(2) Gradually expanding the scope of local currency business of foreign banks
According to the commitments, after China’s accession to the WTO, the scope of local currency business of foreign banks will be expanded from multiple aspects.
First, foreign banks will be allowed to add the discount of negotiable instruments, receipts and payments as agents, and safe deposit box business based on the existing business scope.
Second, the geographic restrictions on foreign banks’ local currency business will be phased out as follows:
(1) Upon accession, Shenzhen, Shanghai, Tianjin and Dalian;
(2) Within one year after accession, Guangzhou, Zhuhai, Qingdao, Nanjing and Wuhan;
(3) Within two years after accession, Jinan, Fuzhou, Chengdu and Chongqing;
(4) Within three years after accession, Kunming, Beijing and Xiamen;
(5) Within four years after accession, Shantou, Ningbo, Shenyang and Xi’an;
(6) Within five years after accession, all geographic restrictions will be removed.
Third, restrictions on business in other regions will be relaxed. Foreign banks licensed for local currency business in one region of China may service clients in any other region that has been opened for such business.
Fourth, the restriction as to the clients of local currency business will be phased out.
(1) Within two years after accession, foreign banks will be allowed to provide services to Chinese enterprises.
(2) Within five years after accession, foreign banks will be allowed to provide services to all Chinese clients.
This means that foreign banks will enjoy national treatment within five years after accession.
(3) Approval of business outlets in the same city
Foreign banks will be allowed to form business outlets in the same city, and the approval conditions will be the same as those for Chinese banks.
(4) Licensing under the principle of prudence
China’s financial regulators shall issue licenses under the principle of prudence, that is, there is no economic needs test or quantitative limits on licenses. Within five years after accession, any existing non-prudential measures restricting ownership, operation, and form of establishment of foreign banks, including on internal branching and licenses, shall be eliminated.
2. Opening of motor vehicle financing
Upon accession, foreign non-bank financial institutions will be allowed to provide services on China’s motor vehicle financing market, and there is no restriction on market access and national treatment. This means that after China’s accession to the WTO, foreign non-bank financial institutions may immediately provide local currency services to residents in the field of motor vehicle financing. Meanwhile, foreign banks may also conduct motor vehicle financing after being allowed to provide local currency services to Chinese residents.
3. Opening of financial leasing services
Upon accession, foreign financial leasing corporations will be permitted to provide financial leasing service under the same conditions as Chinese financial leasing companies upon approval.
II. Commitments on opening up the securities sector
According to relevant agreements of the WTO, the opening of the securities sector shall cover the following:
1. Foreign securities institutions may engage directly (without Chinese intermediary) in B share business.
2. Representative offices in China of foreign securities institutions may become Special Members of all Chinese stock exchanges.
3. Chinese-foreign joint venture fund management companies will be allowed to be established to engage in domestic securities investment fund management business. Foreign minority ownership shall not exceed 33 per cent upon accession, and shall not exceed 49 per cent within three years after accession.
4. Within three years after accession, Chinese-foreign joint venture securities companies will be allowed to be established to engage in underwriting A shares and in underwriting and trading of B and H shares as well as government and corporate debts, launching of funds, and foreign minority ownership shall not exceed 1/3.
III .Commitments on opening up the insurance sector
According to relevant agreements of the WTO, after China’s formal accession to the WTO, the commitments as to foreign insurance institutions shall cover the following:
1. Form of establishment
(1) Upon accession, foreign non-life insurers will be permitted to establish as a branch or as a joint venture with 51 per cent foreign ownership. Within two years after accession, foreign non-life insurers will be permitted to establish as a wholly-owned subsidiary; i.e., with no form of establishment restrictions.
(2) Upon accession, foreign life insurers will be permitted 50 per cent foreign ownership in a joint venture with the partner of their choice.
(3) Internal branching for an insurance firm will be permitted consistent with the phase out of geographic restrictions.
2. Opened regions
(1) Upon accession, foreign life and non-life insurers will be permitted to provide services in Shanghai, Guangzhou, Dalian, Shenzhen and Foshan.
(2) Within two years after China's accession, foreign life and non-life insurers will be permitted to provide services in Beijing, Chengdu, Chongqing, Fuzhou, Suzhou, Xiamen, Ningbo, Shenyang, Wuhan and Tianjin.
(3) Within three years after China's accession, there will be no geographic restrictions.
3. Business scope
(1) Upon accession, foreign non-life insurers will be permitted to provide property insurance, related liability insurance and credit insurance services to foreign-invested enterprises in China. Within two years after accession, foreign non-life insurers will be permitted to provide commercial and individual non-life insurance services to foreign and Chinese clients.
(2) Upon accession, foreign insurers will be permitted to provide individual (not group) insurance to foreigners and Chinese citizens; within three years after accession, foreign insurers will be permitted to provide health insurance, group insurance and pension/annuities insurance to foreigners and Chinese citizens.
Banking and Other Financial Services Schedule 1-1 Schedule of Concessions on Trade in Services.doc
Securities Services Schedule 2-1 Schedule of Concessions on Trade in Services.doc
Securities Services Schedule 2-2 Time Schedule of Commitments on Trade in Services.doc
