After easing market access requirement and foreign ownership limitation, China announced a series of measures last week to further open up the country's banking and insurance sectors for foreign investment. Acknowledging that, Alicia Garcia-Herrero, chief Asia-Pacific economist of the French investment Bank Natixis, said the risk is still too high for foreign investors in China's financial sector and many may take a wait-and-see attitude. 

China now allows foreign-backed insurance companies and overseas lenders to establish wholly-owned banks on the Chinese mainland. That's part of the latest effort to ease access to Chinese financial markets for foreign investors. 

In the meantime, China removed the total asset requirement for foreign institutions, which provided more space for smaller foreign banks to set up offices in China.   

The moves sparked heated discussion at the China Banking and Insurance International Summit Forum held last week in Beijing. The forum released a white paper on China's insurance sci-tech in 2019, which showed new trends of insurance technology development. However, Garcia-Herrero said that it will still take time for foreign institutions to really dare to enter Chinese market. 

Since the global financial crisis, the regulations around the globe, especially Western countries, have made much more costly by banks. Meanwhile, Garcia-Herrero said the risk of doing business in China is really high in terms of large capital needed. "We need both ways. We need China to open truly and the foreign institutions to see the opportunity and grasp it and get in truly," she said. 

With the backdrop of global unrest, Garcia-Herrero is worried about the U.S. taking decisions on IPOs of Chinese banks, even financing in dollar sanctions. She said the world is becoming disconnected in case of certain uncertainties. Also, other experts have cautioned that recession fears and decoupling risks have taken a toll on cross-border investment, which hit its lowest point in a decade last year.