China's securities regulator says it's allowing foreign firms to own a majority stake in local securities ventures. Foreign institutions are already lining up to do business in the Chinese market. Observers say the latest move will bring opportunities to foreign companies, and improve China's financial markets. CGTN's Li Jiejun reports.

In early May, JPMorgan Chase & Co's Hong Kong unit submitted an application to the Chinese securities regulator, to set up a new majority-owned onshore securities business. The application is a step toward JPMorgan's return to China's securities market after exiting two years ago. On April 28th, China took a major step toward the opening of its financial system, saying it would allow overseas companies to take a controlling stake in joint-venture securities firms. JPMorgan says the new rules will give global financial companies unprecedented access to the world's second-largest economy.

NICOLAS AGUZIN, CEO, ASIA PACIFIC J.P. MORGAN "The Chinese equity market has been growing fast with the Chinese debt market. Chinese equity market is about 9 trillion dollars. Chinese debt security market is about 10 trillion dollars. We think that in the long term, if we look at 12 years from now, 2030 for example, it will grow a great amount, because GDP will grow a lot. We expect the market to be about 50 trillion dollars of the market capitalization and the debt market to be 70 trillion dollars."

The huge market provides a significant amount of opportunities for foreign brokerages. Before JPMorgan, UBS and Japan's Nomura also made applications to get majority stakes in China's securities ventures. It's been 16 years since foreign financial institutions began to invest in China's securities firms, but they have long been frustrated by ownership caps that made them marginal players in one of the fastest-expanding financial systems in the world. The new policy can not only benefit overseas players, but also local companies.

XIAO GENG, PROF. THE UNIVERSITY OF HONG KONG "China's financial market has been quite tightly controlled. So the foreign investment banks and security companies are tiny, less than 2 percent of banking. When China announced the new opening policy, it's correct. It's very good. It would allow foreign investors, foreign financial institutions to compete in China. So the other financial institutions in China can learn a lot from some of the good practice. However, because the Chinese financial institutions are so big, the opening would not really threaten the entire financial system."

Experts say it's very important for Chinese securities firms to learn from western expertise and practices, particularly in the areas of risk management and financial product innovation. The opening is a key message that China continues to make its financial markets more international and market-oriented.

LI JIEJUN HONG KONG "Experts say the arrival of more overseas investment may hit domestic financial institutions in the short term. But the competition will benefit consumers, and push China's economic reform. This will bring dynamism to China's capital market in the long run. LJJ, CGTN, HK."