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China's Reforms Move May Just Be Bargaining Chip for US Negotiators

Saibal Dasgupta

   BEIJING - Chinese Premier Li Keqiang recently announced a major
   economic reform move, saying China would scrap ownership controls on
   foreign companies investing in the financial sector next year, ahead of
   schedule.

   "We will achieve the goal of abolishing ownership limits in securities,
   futures, life insurance for foreign investors by 2020, a year earlier
   than the original schedule of 2021," Li said while speaking at the
   Summer Davos in the Chinese seaside city of Dalian.

   His government also will reduce restrictions next year on market access
   for foreign investors in the value-added telecoms services and
   transport sectors, according to the premier.

   The announcements appear to be a response to a much discussed need for
   widening economic reforms and aligning the Chinese financial industry
   more closely with the international market. Some analysts contend,
   though, this may be part of Beijing's effort to counter U.S. President
   Donald Trump's criticism of China's opaque markets and move toward a
   settlement to end a trade war.

   "The timing of the announcement suggests that it has more to do with
   the trade negotiations than anything else," said Julian
   Evans-Pritchard, China economist at consulting firm Capital Economics.
   "China is expecting some kind of concessions in tariffs."

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