The bilateral pledge came as a result of German Finance Minister Olaf Scholz visiting the Chinese capital this week. Mr Scholz met China’s vice-premier Liu He who promised to take down economic hurdles for German financial institutions interested in doing business in his country. The German minister said he would reciprocate, hoping Chinese banks could be persuaded to open in Frankfurt, the heart of Germany’s finance industry, turning the city into a European powerhouse after Britain leaves the EU.
According to German newspaper Suddeutsche Zeitung, the two officials signed three agreements during a meeting in Beijing this week where Mr He said “German banks are welcome here.”
The welcome comes despite China being a notoriously difficult market for foreign financial businesses to tap into.
The three agreements signed by Mr Scholz and Mr He pleas for banking supervisors of both countries to co-operate, closer working between central banks and more ties on securities trading.
There are about 5,200 German companies in China but very few operating in the financial sector due to decades of China’s closed policy.
China’s state controls more or less the entirety of the country’s financial sector and only a handful of foreign banks operate in Beijing, with Barclays, HSBC and Standard Chartered being the only ones recognised from a British High Street.
Companies operating in China criticise the difficulty to get loans and more hostile business environment.
Süddeutsche Zeitung added lending and financing large investments has struggled to be transparent in the past for outside businesses.
Berlin’s move is the latest tactic Germany has employed to get China on-side as the country turns from customer to competitor.
For decades China has bought German cars and industrial goods, all of which has helped turn it into the world’s second-largest economy.
However official figures posted earlier this week show the German economy had its weakest growth for five years amid fears a slump in the European economy could be imminent.
Volker Treier believes the business future of Germany companies in China is ‘clouded’
“The business outlook for German companies in China is getting clouded,” said Volker Treier of Germany’s DIHK Chambers of Industry and Commerce.
However Scholz is hoping his trip to Beijing will change that forecast and even open up other industries to operating in China.
For Germany, the agreements have the potential to build on Germany finance institution Allianz Group who were able to establish China’s first foreign insurance holding company in November.
Germany’s largest carmaker, Volkswagen, is investing billions of dollars in electric vehicles as part of the global industry’s plans to pour almost $150 billion in China.