China is clearly a market on the move in regulatory and operational terms as it seeks to enhance its attractiveness to offshore investors.
When assessing the market through the lens of Global Custodian’s latest Agent Banks in Emerging Markets survey, clients appear to be very satisfied with their providers in the country – scoring an overall rating of 5.79 to land in the top-end of the ‘Good’ segment. 
When compared with global counterparts, providers in China outstripped the global average in eight of the 13 categories. In the key category of Client Service, providers scored a very impressive average score of 6.19 – driven in part by the near-perfect score of 6.8 achieved by Deutsche Bank.
Data Services, Service Innovation, and Technology were three other categories to score significantly higher in China than in the rest of the surveyed countries, suggesting providers in China are placing focus on the service development side of their businesses, utilising the latest innovations to the benefit of their clients.
Where there is room for improvement, however, is in the categories of Relationship Management and Securities Lending, which scored 0.14 and 0.26 below the global average, respectively. Despite the global comparison, both of the categories remain in the Good range.
Another interesting trend to note is the falling number of respondents to rank specific services they receive from providers as Excellent (7) – which could perhaps be the reason behind China’s overall market performance dipping 29 basis points from the previous year. 
Back in 2020, almost half of all scores received from respondents (46%) were in the Excellent range. Fast forward to 2023 and that number has dropped to 36% – which is still an impressive return.
Market trends
With regards to the accelerating initiative of enhancing the attractiveness of the market to offshore investors, Deutsche Bank indicated that further relaxation on capital management of qualified foreign investors is expected. As a result, BNP Paribas told Global Custodian, “We expect increasing client onboarding and trading activities/AUC volume from a securities services perspective.”
In May 2023, the Shanghai Stock Exchange (SSE) and the Singapore Exchange (SGX Group) signed a Memorandum of Understanding (MOU) on ETF product connectivity (SSE-SGX ETF connect). The exchanges will focus on strengthening cooperation in ETF product connectivity. Responses for services in China were recorded for BNP Paribas, Deutsche Bank and Standard Chartered Bank as well as a few each for DBS Bank, HSBC, China Construction Bank and ICBC.