President Xi Jinping's speech at the Global Trade in Services Summit earlier this month is a reiteration of China's policy, announced in 2017, to liberalize the country's services sector.

The policy direction is not a surprise, but to the international business community, the speeding up of the process is.

In recent months, several liberalizing measures have taken effect, especially in the financial services sector. Foreign ownership limits on financial companies were removed, so overseas financial service providers can establish majority owned and wholly owned companies in China.

Allianz (China) Insurance Holding, which became the first fully foreign-owned holding company, and Nomura Orient International Securities, which has become the first securities company with foreign majority-ownership, are cases in point.

The removal of ownership caps encouraged global financial services giants to raise their stakes in China. Besides Allianz and Nomura, big names in the sector such as Goldman Sachs, Morgan Stanley, UBS, HSBC, Visa, Mastercard, Black Rock and Vanguard have so far taken advantage of the liberalization.

Other financial services also witnessed liberalization. Payment system American Express and its Chinese joint-venture partner can now clear payments in renminbi, and Fitch Ratings opened a wholly owned subsidiary, Fitch Bohua, to provide services in China. Foreign funds can also invest in mainland-traded stocks and bonds.

The stepped-up liberalization of the Chinese services sector can create many mutual benefits for all involved.

The most obvious beneficiary group is the global financial institutions that now have easier access to the Chinese financial sector, worth about $4.12 trillion in combined assets under management.

For China, the benefits from liberalization can be multifaceted and long-lasting.

The advent of more foreign financial firms in the country will, first of all, help upgrade the sector. More competition will force domestic companies to improve their sophistication and competitiveness. Local employees working for foreign companies can learn and upgrade their technology and management skills.

Second, foreign companies can attract foreign capital into China. The top foreign financial companies have a deep and wide global network that can channel capital into China to propel its growth, in the face of rising obstacle in exports that can slow down capital inflows from trade. In less than one year since the relaxation of restrictions, China has already seen a large increase in foreign holdings of Chinese stocks and bonds, and capital inflows.

Third, further opening up sends a strong message of pro-globalization, a timely contrast to the protectionist stance of the United States. Countries that are pro-trade and pro-global capital flows would find this message consistent with their own policies. Politically, this can strengthen China's position in trade negotiations.

Fourth, with more liberal business conditions on the Chinese mainland, global banks may be enticed to choose Shanghai, Beijing or other Chinese cities over Hong Kong Special Administrative Region for their operational bases. This transformation will not happen overnight, as it has taken Hong Kong several decades to become a prominent financial center. But the recent liberalization measures are a good start.

Policy success, however, depends on several factors. To name a few, services are about people, thus a lot of personal information collected from clients would be gathered. Financial services require a high level of trust by all involved. Therefore, it is crucial to have a high standard in data privacy protection, disclosure and transparency.

Along the same line, foreign companies need an assurance of intellectual property protection for the technology and trade secrets that they bring into the country.

With more foreign companies in the financial system, Chinese authorities will need to change their supervisory scope and style. The Chinese banking sector up till now has been tightly supervised as well as supported by the central bank. Foreign banks will most likely want more freedom in their operational decisions.

When an economy is more linked to the global market, there is an increasing need for macro prudential measures to stabilize it, should global forces shake it abruptly. This translates into a close coordination with central banks around the world as well as strengthening of the capital base and work scope of international organizations whose efforts are needed when global stability is called for.

President Xi said in his speech that he wanted an "open, transparent, inclusive and nondiscriminatory environment". That is certainly the way to go. Hopefully, there is enough political will to bring the policy to success.

The author is senior lecturer and academic director of the Nanyang Fellows MBA program at the Nanyang Business School at Nanyang Technological University in Singapore.