China looks all set to open up its financial sector, starting with removing business restrictions on foreign banks, brokerages and fund management companies. The decision was taken following a cabinet meeting led by Premier Li Keqiang.

This was one of the key issues that caused the US-China to aggravate for over a year, as the US insisted on China granting access to foreign players in its tightly controlled financial services sector. However, given that the sector is now dominated by state-owned companies, the impact of this decision could be a limited one.

This latest move comes a day after the cabinet eased rules for managing foreign insurers and banks, increasing their scope of access to China’s financial markets. Last year, China had relaxed norms to permit foreign brokerages to own a majority stake in Chinese companies, opening up the securities sector in China.

However, China still restricts access to more sensitive operations in this sector, including giving foreign companies licences to conduct clearing operations.