China’s Finance World Opens Up to Foreigners, Sort Of

Despite rising trade tensions globally and a domestic crackdown on private enterprise, China has steadily opened its massive market to foreign banks, insurers, asset managers and payment companies. Wall Street giants such as JPMorgan Chase & Co. and Goldman Sachs Group Inc. are leading the chase after billions of dollars in potential profits. Regulators also have been making it easier for foreigners to buy Chinese stocks and bonds -- something many fund managers are required to do now that major index compilers are including such assets in their gauges. It’s all coming to the growing dismay of some U.S. politicians, who balk at more capital flowing to their biggest geopolitical and economic rival.

China’s $58 trillion financial services industry. Even a sliver can be lucrative. Bloomberg Intelligence forecast in 2020 that foreign commercial bank assets in China could rise 9.3% a year through 2025. Even then it’d only be 1.2% of the total market, up a tick from 1.1% -- illustrating how huge the market is. This year, the analysts saw foreign banks on track to claim 1.1% of China banking profits in 2025 and 2030, or about $7 billion. If U.S.-China relations sour further, though, those forecasts could slip as some players retreat and others put expansion plans on hold.