China foreign ownership limits have been waived by removing the holding limit in domestic financial entities including banks and asset management companies in a bid to further open up the sector.

Earlier, such holdings were restricted to 20% for a single institution and 25% for group of investors.

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Why China foreign ownership limits have been waived

According to Bloomberg, China Banking and Insurance Regulatory Commission in a statement said that all foreign companies are now regarded as local institutions.

The new policies were implemented following a public consultancy period that ended last month.

Besides scrapping restriction on foreign holdings, the commission also abolished a 15-year investment management document on foreign investment.

Currently, China is pursing multiple initiatives to open up the financial sector amidst escalating trade war with the US.

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The initiatives include reducing restrictions on foreign investors to encourage more investment in equity and bond markets.

The decision to scrap limits on foreign holdings is expected to directly benefit major international financial giants such as Nomura and JPMorgan which are reportedly planning to establish joint ventures in China.

At the end of 2016, foreign banks had $420.1bn of assets in the country, around 1.3% of the total share, according to CBIRC data.

According to Bloomberg Intelligence, foreign banking revenues are expected to increase ten folds by 2030.

Currently, Chinese banking sector is dominated by state-owned entities including Bank of China, the China Construction Bank and the Industrial and Commercial Bank of China.