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China has announced plans to lift limits on foreign stakes in banks and other financial companies, in what would be a big step towards its long-awaited pledge to open its domestic financial sector to competition.

Zhu Guangyao, vice-minister of finance, said foreign and domestic investors would be treated equally with respect to their ability to own stakes in Chinese commercial banks and asset management companies.

The announcement on Friday comes a day after US President Donald Trump called on his Chinese counterpart Xi Jinping to allow US companies greater market access to China, where foreign lenders have long complained about regulations hampering their growth.

Mr Zhu said China would eliminate a 20 per cent ceiling on ownership of Chinese banks and financial asset management companies by any single foreign investor, and abolish a 25 per cent limit on total foreign holdings in those two categories.

Foreign majority ownership would be permitted in securities, fund management and futures trading joint ventures, with the ceiling lifted to 51 per cent. Mr Zhu added that all limits on foreign investment in such companies would be eliminated after three years.

Foreign investor ownership of insurance joint ventures would also be lifted to 51 per cent after 3 years and removed entirely after 5 years.

More to follow

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