In fulfilling its WTO commitments, China has been gradually widening the scope of market access for trade in services. The following are the main sectors opened to the outside world:

(a) Banking:

‧ Geographical restrictions on foreign banks conducting Renminbi business are gradually lifted. Foreign banks were allowed to conduct Renminbi business in Shanghai, Shenzhen, Tianjin and Dalian upon WTO accession. Guangzhou, Zhuhai, Qingdao, Nanjing and Wuhan were added to the list on 1 December 2002, and Jinan, Fuzhou, Chengdu and Chongqing on 1 December 2003. The pace of liberalization of China’s banking sector has actually moved ahead of schedule. Xian and Shenyang were added to the list on 1 December 2004, a year ahead of time. On 6 December 2005, China further liberalized its banking sector by allowing foreign—invested financial institutions to extend their renminbi business to Shantou and Ningbo. Five cities, including Harbin, Changchun, Lanzhou, Yinchuan and Nanning, were also opened ahead of schedule. The banking sector was fully open to foreign participation when the WTO accession transition grace period ended on 11 December 2006.

‧ Client restriction on renminbi business has been removed.

‧    Client restriction on foreign currency business was lifted upon accession.

(b) Insurance

‧ Foreign non-life insurers were allowed to set up branches and joint ventures (JVs) in China with majority ownership upon accession.

‧ Foreign life insurers are allowed to set up JVs with ownership up to 50% and are free to choose their partners.

‧ On the lifting of geographical restrictions, foreign life and non-life insurers and insurance brokers were all owed to offer services in Shanghai, Guangzhou, Dalian, Shenzhen and Foshan upon WTO accession. In 2003, 10 cities including Beijing, Chengdu, Chongqing, Fuzhou, Suzhou, Xiamen, Ningbo, Shenyang, Wuhan and Tianjin were added to the list.

All geographical restrictions were lifted on 11 December 2004.

‧ The issuance of insurance license is not subject to economic needs test (or quantitative restriction).

‧ The business scope of foreign insurance companies has been broadened. Foreign non-life insurers are allowed to provide “master policy” insurance of large—scale commercial risks with no geographical restrictions, provide insurance to enterprises outside of China, and provide property insurance, related liability insurance and credit insurance to foreign—invested enterprises (FIEs) in China. Foreign insurers may also provide reinsurance service in the form of setting up a branch, JV, or wholly-owned subsidiary without geographic, quantitative, or licensing restrictions. Since December 2003, foreign-invested property insurance companies have been allowed to engage in all kinds of non—life insurance with the exception of statutory insurance business.

‧ As from 11 December 2006, foreign insurance brokerage companies are allowed to set up wholly-owned insurance brokerage companies in China.

(c) Securities

‧ Representative offices of foreign securities firms in China are allowed to become members of China’s stock exchanges.

‧ Foreign securities firms are allowed to trade B-shares directly (i.e. without going through Chinese intermediaries), and are allowed to trade B-shares, H-shares, government bonds and company bonds (including new products).

‧ Foreign firms are allowed to set up JVs for fund management business with an equity ratio of up to 33%.

‧ Foreign firms are allowed to set up JVs for securities fund management business with an equity ratio of up to 49%.

‧ QFIIs are allowed to enter China’s capital market for securities investment.

(d) Telecommunications:

‧ Foreign companies are allowed to set up JVs to offer value-added and basic telecom services (except paging service). There is no restriction on the number of JVs established, but foreign investors may not hold controlling stakes.

‧ Foreign companies are allowed to offer value-added telecom services in Beijing, Shanghai, Guangzhou, Chengdu, Chongqing, Dalian, Fuzhou, Hangzhou, Nanjing, Ningbo, Qingdao, Shenyang, Shenzhen, Xiamen, Xian, Taiyuan and Wuhan, but foreign equity ratio may not exceed 49%. Six years after WTO accession, geographical restrictions were lifted.

(e) Logistics

‧ For road transport, enterprises, other economic organizations or individuals from other WTO member states may establish road transport enterprises in the form of wholly—owned enterprise (including merger and acquisition) in China. Hong Kong and Macau’s franchised bus services companies and non-franchised bus services companies engaged in Guangdong-Hong Kong or Guangdong-Macau direct non-stop bus services are allowed to set up joint-venture enterprises to Provide inter-city passenger bus services in Guangdong, Guangxi, Hunan, Hainan, Fujian, Jiangxi, Yunnan, Guizhou and Sichuan. Hong Kong or Macau’s franchised bus services companies are also allowed to establish wholly-owned enterprises in municipal—level cities on the mainland to provide urban passenger public transport and hire car services. The Regulations on the Management on Foreign Investment in Road Transport promulgated in November 2001 clearly laid down the requirements and approval procedures for foreign-funded road transport companies (both passenger and freight).

‧ For maritime transport, Sino—foreign equity joint ventures and Sino-foreign contractual joint ventures are allowed to operate international shipping, international shipping agency, international ship management, international marine freight loading and unloading, international marine freight warehousing, international marine shipping container terminal and yard businesses. Foreign-invested enterprises are also allowed to operate international marine freight warehousing business. The Regulations of the PRC on International Maritime Transportation promulgated at the end of 2001 laid down the principles for foreign investment in international maritime transport and auxiliary activities.

‧ In air transport, the Provisional Regulations on Foreign Investment in Civil Aviation further eased requirements for foreign investment in China’s civil aviation sector.

‧ In international freight forwarding, according to the Administrative Measures on Foreign in yes ted International Freight Forwarding Enterprises, wholly foreign-owned international freight forwarding enterprises are permitted to be set up in China. The minimum registered capital for the establishment of foreign—invested international freight forwarding enterprises is US$1 million.

Hong Kong service providers are permitted to establish international freight forwarding enterprises on the mainland in the forms of equity joint—venture, contractual joint—venture and wholly—owned enterprise.

(1) The minimum registered capital for operating international marine freight forwarding business is Rmb 5 million;

(2) The minimum registered capital for operating international air freight forwarding business is Rmb 3 million;

(3) The minimum registered capital for operating international land freight forwarding business is Rmb 2 million. For those engaging in two or more of the above businesses, the highest minimum registered capital will apply.

(f )Tourism

‧ Foreign firms are allowed to establish majority-owned or wholly—owned travel agencies in China.

‧ The minimum registered capital of JV travel agencies is further lowered to Rmb 2 .5 million.

‧ The requirement that each foreign JV operator can only establish one JV travel agency is lifted.

‧ Geographical restrictions were lifted on 17 February 2005 (three years ahead of schedule).

(g) Legal Service

‧ Foreign and Hong Kong law firms are allowed to open representative offices upon approval to offer legal services but cannot practice Chinese law.

‧ Geographical and quantitative restrictions on representative offices of foreign legal firms were lifted in January 2003. The one-firm one-office system has also been scrapped.

(h) Accounting Service

‧ Foreigners can sit for the Chinese CPA (chartered public accountants) examination and receive national treatment.

‧ Foreign-funded accounting firms are allowed to offer consultancy service to FIEs as well as Chinese companies listed abroad or in China’s B share market.

 All the information and data above is only for reference, for further information, please feel free to contact us.

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