Economic review

PBOC governor: China’s financial openness depends on BIT negotiations

2017-03-27 10:46:00 (Beijing Time)         CGTN

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China will be more open to foreign investment in its financial sectors, but the level of openness depends on compromises of all parties concerned during bilateral investment treaty (BIT) negotiations, said People's Bank of China governor Zhou Xiaochuan on Sunday.

Speaking during the Boao Forum for Asia, Zhou stated China has prepared, in its BIT negotiations with the US and its trade talks with European and ASEAN countries, to take even more significant steps to open up its banking, insurance, investment banking, securities and payments sectors.

However, he noted that China hopes Chinese investors, particularly those in private sectors, can gain fair treatment overseas after it opens up its financial sectors. The governor added that China's attempts to import high-technology in at least civilian sectors should be allowed.

"Each party should make some compromises. Only then can globalization move forward and all benefit from it," said Zhou.

China will substantially cut the number of sectors on the negative list which are not open to foreign investment and offer foreign investors fair treatment in its 11 free trade zones, according to Zhou.

The governor also mentioned U.S. President Donald Trump's call for a "big border tax" on imports or the Border Adjustment Tax (BAT), which has been a topic of much discussion around the world. It is believed that BAT will lead to the appreciation of the U.S. dollar by 20 to 25 percent.

Bai Chongen, a Tsinghua University professor and member of the central bank monetary policy committee, suggested further openness in foreign direct investment be considered to reduce the negative impact of the U.S. tax reform on China.

Zhou indicated that it remains to be seen whether or not the U.S. will implement BAT in its tax reform. He said China has prepared for further openness in recent years, but its openness is not directly connected with the foreign exchange rate.

The governor noted that China is waiting to see how the Trump administration approaches trade and investment negotiations. Meanwhile, China is actively negotiating with Japan, European and ASEAN countries to achieve positive results as early as possible.