China's financial opening up attracts growing number of foreign institutions

China's ongoing financial reform and opening up has attracted an increasing number of foreign financial institutions to establish and expand their operations in the country.

China has the presence of 24 global systemically important banks so far, and nearly half of the world's top 40 insurance companies have established branches in the country.

Last month, four foreign financial institutions in securities and reinsurance opened new branches in Shanghai, including Hannover Re, a German reinsurer.

The company obtained its permit to open in less than four months after China's policies to allow foreign reinsurer branches to set up reinsurance centers in Shanghai's Lingang Special Area at the China (Shanghai) Pilot Free Trade Zone, according to Lye Fook Kong, general manager of Hannover Re Shanghai branch. "They specifically made it possible for us. I know it was an issue to begin with, but they molted it down and they spent time and they really worked hard on it. There was a lot of discussions. Everybody's working very sensibly. Imagine that. I have received calls from them over the weekends, I mean discussing with them. And everybody's working overtime just to get it done," said Lye.

So far, five foreign institutions have gotten the approval to open reinsurance centers, and two brokerage firms received approval for reinsurance branches.

Now, Shanghai's Lujiazui area is home to more than 150 foreign financial institutions, many of which have moved there in the past two years.

China has introduced more than 50 measures to ease market access for foreign financial institutions.

In January this year, the People's Bank of China and other four departments rolled out 20 measures, allowing foreign financial institutions to start new services, streamlining approvals, and supporting cross-border services. These measures, piloted in cities such as Shanghai and Guangdong, have created a fair, transparent, and predictable market for foreign financial institutions.

"In recent years, China has greatly expanded market access in the financial services sector, completely removed foreign ownership caps, and expanded cross-border investment and financing channels. Foreign financial institutions in banking, securities, insurance, and asset management are entering the Chinese market at a faster speed. The financial opening up has paced up remarkably to a higher level," said Dong Ximiao, a chief researcher of Merchants Union Consumer Finance Company, Ltd.

China's financial sector has developed a multi-channel, multi-layered opening up, covering stocks, bonds, derivatives, and foreign exchange markets. Its bond market, the second largest globally, has 4.3 trillion yuan (about 589.68 billion U.S. dollars) worth of outstanding bonds of foreign institutions held in custody.

China's financial opening up attracts growing number of foreign institutions

Japanese people gathered in Tokyo on Friday to protest against the government's recent decision to revise the "three principles on transfer of defense equipment and technology" which now allows the export of lethal weapons.

On Tuesday, the Japanese government, led by Prime Minister Sanae Takaichi, officially revised the "three principles on transfer of defense equipment and technology" and their implementation guidelines.

The revisions scrap the restrictions that had limited arms exports to five non-combat categories, allow, in principle, the export of lethal weapons, permit transfers to nations engaged in active conflict under specified circumstances, and sideline parliament from the decision-making process -- crossing a line that previous governments had at least nominally upheld.

Protesters assembled in Shinjuku district on Friday evening, voicing strong opposition to the dangerous shift away from Japan's postwar pacifist principles and expressing deep concerns over Japan's failure to fully reflect on its wartime past.

"It's unforgivable. Revising the 'three principles on transfer of defense equipment and technology' through a simple Cabinet decision is absolutely unacceptable," said a protester.

"We should have properly reflected on the war that happened over 80 years ago, but we haven't. Is it acceptable if people are killed by the weapons, missiles, or bombs we export? Absolutely not. Such a thing must never be allowed to happen. That is why I strongly oppose this policy," said another protester.

Also on Friday, over a thousand protesters gathered in front of the Liberal Democratic Party (LDP) headquarters, holding placards and chanting slogans demanding the resignation of Takaichi.

They expressed growing frustration with the current administration and condemned the export of lethal weapons.

"This has gone too far. Japan is becoming an outrageous country. From exporting weapons to revising the Constitution, everything is shifting. The LDP has long had this tendency, and under the Takaichi administration, the situation has become even worse. If we don't stop this now, Japan will turn into a truly frightening nation," said a protester.

"Manufacturing and selling weapons that may be used to kill people is something the Japanese public cannot tolerate. The government made this decision arbitrarily, and it is completely unacceptable," said another protester.

"I really hope the government stops exporting lethal weapons. My child even asked me, 'Is Japan going to sell weapons and start a war?' We must do everything we can to prevent this from happening," said a mother participating in the rally, expressing her worry for future generations.

Protesters gather in Tokyo, protest against Japan's move to allow lethal weapon exports