In testing time, Beijing must resolutely pursue reform and opening-up at own pace

By Hu Weijia Source:Global Times Published: 2018/11/25 23:13:39

China has granted German insurer Allianz permission to establish the country's first wholly foreign-owned insurance holding company. The approval, which came several years earlier than anticipated, is a positive signal that the opening-up of China's financial sectors will accelerate.

The central government has stressed the importance of speeding up the pace of ownership reforms for banking, securities and other financial institutions. The country will carry out its commitment: the only question remaining is how such policies can be effectively implemented.

A prudent, phased-in process could help China avoid turmoil caused by competition with foreign-owned companies, but this cannot be an excuse for procrastination by some local governments.

Amid the ongoing process of restructuring, China's economic picture has become more complex and uneven. Some of China's most developed regions can be pioneers in the country's ownership reforms, creating a demonstration effect for latecomers. An uneven development plan can actually improve the overall speed of China's financial sector's opening-up.

The State Council, China's cabinet, on Friday announced measures to deepen economic reforms in the nation's pilot free trade zones (FTZs). The new policies will lower thresholds for foreign companies in areas including construction, healthcare and financial services.

China will continue to open up new markets to foreign investors, and the FTZs will be a testing ground for the nation's special policies. The country needs to focus more attention on pilot FTZs and accelerate the pace of economic reform in those zones.

This is a testing time marked by uncertainty amid ongoing trade friction. The rise of protectionism is eroding momentum in the global economy to carry out a substantial opening-up. Skepticism about whether China will fulfill its commitment is understandable, but the case of Allianz shows that China is unlikely to give up halfway on its opening-up strategy. Despite trade tension with the US, China should steadfastly stick to the path of opening-up and proceed at its own speed and rhythm in pursuing economic reform.

The author is a reporter with the Global Times. [email protected]


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