“Opening-up doesn’t mean relaxing regulations.” Those are the words from the governor of the People’s Bank of China, Yi Gang, as he addressed China’s recent financial opening-up policies on May 29.

“We have to insist that financial services are licensed businesses, that we are opening the financial sector doesn’t mean anyone can do financial business in China. Every financial institution, no matter Chinese or overseas, must obtain official licenses from the regulator before legally operating a business in China,” he said.

Yi spoke at Beijing’s Financial Street Forum annual meetings, which gathered hundreds of international bankers and investors, and emphasized investors’ education during his talk.

“Investors need to understand pies won’t fall from the sky freely. If you are approached by an investment product that guarantees safety and double-digit annual returns, you’ve got to be careful. You’ve got to see what exactly this investment is about,” he said.

Yi’s remarks were echoed by a number of international bankers, who said managing risk and controlling the pace during opening up was crucial. Michala Marcussen, Group Chief Economist of Societe Generale, said that the process should be completed step by step.

“This is very important also from a risk management perspective because if you suddenly move things too quickly, this itself could be damaging,” he said. “Then, you may be forced to roll back, and this loses credibility both internationally and domestically. So, good ideas, good pace, and the right measures at the right time.”

Chinese financial experts also are welcoming the opening-up. They say that even after years of government’s encouragement to lend more to small companies, the bulk of China’s bank credit still goes to less efficient state firms. That results in banks’ low return on equity and slow innovation.

“Look at small and medium-sized enterprises. They still face very difficult problems to get credit. What’s the reason? Even now SOE contribute less and less GDP growth, employment, SOE still got a very big pie of total credit. I think that’s unfair. That’s inefficient,” said Professor Xiang Songzuo from the School of Finance under Renmin University of China.

Only competition can change the situation. However, Chinese and international experts agree that China’s financial opening-up is less about competition and more about adding complementary businesses.

China’s own financial institutions are too bulky to be effective on allocating resources. And overseas players are expected to inject vitality and change the momentum.