The country’s hesitation to open its securities markets fully to foreign investment has restricted the operations of foreign securities firms and slowed the pace of reforms in China’s capital markets.

Global experience demonstrates that more competitive capital markets are more efficient markets. They improve the allocation of capital to borrowers and to users, facilitate the hedging and diversifying of risk, and assist in the exchange of goods and services.

China currently restricts financial services firms from owning 100 percent of a Chinese financial services firm. China limits the types and size of investors as well as the length and size of investments. China also prohibits firms operating in China from engaging in the transaction of certain financial products such as derivatives, and does not have a fully transparent regulatory process.