This July 12, 2018, photo shows the skyline of the Lujiazui Financial District with high-rise buildings and skyscrapers in Pudong, Shanghai. (PHOTO / IC)

China brought forward the planned opening of its US$21 trillion capital market by eight months, swinging the door open for global investment banks such as Goldman Sachs Group Inc.

The New York-based powerhouse, and rivals including JPMorgan Chase & Co and Morgan Stanley, will now be allowed to apply to form fully owned units to do a broad array of investment banking and securities dealing in China in April, compared with an earlier timetable set for December.

The decision was included in the signing of a trade deal with the US, partially resolving a protracted dispute that has weighed on the world’s second-largest economy. China had already committed to a broader opening of its US$45 trillion financial markets, which also includes given access to its asset-management and insurance markets.

Global investment banks will be allowed to apply to form fully owned units to do a broad array of investment banking and securities dealing in China in April

“China shall eliminate foreign equity limits and allow wholly US-owned services suppliers to participate in the securities, fund management, and futures sectors,” according to the text of the landmark Phase 1 trade agreement released Wednesday.

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China said it won’t take longer than 90 days to consider applications from providers of electronic-payments services including American Express Co, Mastercard Inc and Visa Inc to handle transactions in the nation. It will remove restrictions to allow US-owned insurance companies into its markets and also open its US$14 trillion market to US credit-rating companies.

As a reciprocal move, the US will “consider expeditiously” pending requests by Chinese financial firms including Citic Securities Co, China Reinsurance Group Corp and China International Capital Corp. It committed to “non-discriminatory” treatment of payment providers such as UnionPay Co and Chinese credit rating companies.

China is also opening its market to allow more foreign investment into the country’s 2.37 trillion yuan (US$344 billion) non-performing loan market, giving US investors direct access to the market as part of its trade deal amid a surge in bad loans.

While Wall Street’s giants and their European counterparts have been present on the Chinese mainland for decades, and done deals for the country’s corporate titans, they have until now had limited opportunity to do direct business, having had to operate through joint ventures with local partners. Full ownership would be a final step after they in late 2018 were given the go-ahead to take majority control over their ventures.

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Much Welcome

China has made “significant commitments” in the deal, Jake Parker, vice-president at the US-China Business Council, said in an e-mailed comment. “While China has already in the past year announced many of the commitments on the financial openings in the agreement, the inclusion of specific timelines on when these commitments will be implemented is very much welcome and will improve enforceability going forward.”

UBS Group AG, Nomura Holdings Inc and JPMorgan already hold a majority in their ventures, while the others are in the process of applying for a 51 percent stake. It’s unclear if the application process will now move straight to the 100 percent hurdle.