On February 6, 2025, China further advanced its commitment to financial sector openness by promising equal treatment for domestic and foreign financial institutions in the free trade zones (FTZs). A new guideline, jointly issued by the People's Bank of China (PBOC) and several other departments, lays out 20 key measures designed to boost financial sector institutional opening, with particular focus on Tianjin's Free Trade Zone (FTZ) and other eligible regions.

New Financial Services for Foreign Institutions

The guideline emphasizes that foreign financial institutions will now be able to offer new financial services within China’s FTZs—services that have yet to be introduced in the domestic market but are already available and regulated in other countries and regions. This move is part of China's broader effort to create a more inclusive financial ecosystem that allows foreign players to compete on an equal footing with their domestic counterparts.

Key provisionsof the guideline include:

·Equal Treatment: Foreign institutions will be allowed to provide the same financial services as domestic firms, unless national security or financial security concerns are at play.

·Trial Regions: The measures will apply to FTZs in Shanghai, Tianjin, Beijing, Guangdong, Fujian, and Hainan, as well as designated platforms that play a key role in financial opening-up.

This initiative ensures that foreign financial institutions will have access to pilot projects for services that are currently being tested in these FTZs, allowing them to participate fully without exclusion.

Expedited Decision-Making and Enhanced Cross-Border Financial Flow

Other significant measures outlined in the guideline include:

·Timely Approvals: The authorities will make decisions regarding foreign financial institutions' service applications within 120 days, streamlining the approval process to encourage quicker market entry.

·Cross-Border Financial Services: The guideline also supports cross-border purchases of overseas financial services, further facilitating foreign investors' entry into China's financial market.

·Financial Data Flow: Provisions have been made to improve the infrastructure for cross-border financial data exchange, enhancing transparency and efficiency in international financial transactions.

Strengthening Tianjin's Role in Financial Innovation

As a part of China's strategic push to open its financial markets, the Tianjin FTZ plays a vital role in these changes. The move aligns with Tianjin's goal of becoming a hub for financial innovation and cross-border finance. By enhancing foreign participation in local financial markets and ensuring regulatory consistency, Tianjin is poised to attract more global financial institutions.

The Tianjin FTZ, along with the other designated zones, will provide the testing grounds for these new financial services. This strategy reflects China's broader goal of integrating with global financial systems while balancing the need for domestic stability.

A Step Forward for Financial Opening in China

The new guidelines reflect China's ongoing efforts to build a more open, internationalized financial system, offering foreign financial institutions a more level playing field. The measures are expected to bring about significant changes in the regulatory landscape, opening up more avenues for foreign investment and financial services in the country.

By expanding the scope of financial opening and providing concrete support for the participation of foreign institutions in trial regions, the government is setting the stage for greater international financial integration. For Tianjin, this is a major step towards strengthening its financial sector and solidifying its position as a key player in China's financial market reforms.