Opening up China's financial sector significantly strengthened the appeal of the country to foreign investors over the past year, with a range of overseas institutions boosting their presence in the nation.

Chinese regulators gave approval to a number of foreign insurers, banks and asset management companies last year to establish wholly-owned subsidiaries, a move experts said indicated the country's resolve to advance opening-up of its financial sector.

The key decisions included Citigroup becoming the first United States bank to receive a domestic fund custody license in China, following regulatory moves to further open up the nation's mutual funds sector.

Insurance giant AIA Co was given approval to set up the first wholly foreign-owned life insurance company on the Chinese mainland.

Christine Lam, president and CEO of Citi China, said in a media release, "As the first American bank to be granted a domestic fund custody license, we're proud to be able to help our global clients gain access to China's capital markets, which are experiencing a new round of comprehensive reforms.

"There are tremendous opportunities for global players to participate. Citi is well positioned to help them navigate these potential opportunities."

Zhang Liqing, director of the Center for International Finance Studies at the Central University of Finance and Economics in Beijing, said China's accelerated steps in opening up its financial sector had almost leveled the playing field between Chinese and foreign businesses.

"Over the past year, foreign institutions have responded actively to new opening-up measures and quickened their steps to build up their presence in the Chinese market," he said.

In another landmark move, Oaktree Capital Management, a global asset management company focused on alternative markets, established a wholly-owned subsidiary in Beijing in February.

Also that month, the People's Bank of China, the country's central bank, approved an application from Mastercard's Chinese joint venture to conduct bank card clearing business in the country.

In October, a report released by global consultancy McKinsey & Co stated, "In this round of opening-up, foreign institutions are entering the Chinese market in more flexible forms and they are being offered access to more diversified business areas."

The report added that with China opening up the banking, insurance, securities and asset management sectors, foreign institutions－with their rich management experience and strong service capacities－will offer Chinese consumers more diversified options.

"Bringing in more foreign financial institutions (to the Chinese market) will stimulate the vitality of market operations, refine the structure of the financial market, improve the efficiency of allocation and help with the reform and development of the national financial system," it said.

Zhang said further opening up China's financial sector would be a key move for the country to foster a "new development paradigm".

"It is important to scale up institutional opening-up and remove barriers that hinder the free flow of commodities, services and various elements of production so that more production elements from other countries can be integrated with domestic economic circulation," he said.

Greater strides in opening-up would result in a rise in the number of financial institutions, improve services and encourage more innovation in financial products through a higher level of competition, he said.

Zhang added that the country could also consider expanding liberalization of capital accounts－allowing more foreign capital in direct investment and portfolio investment to enter the Chinese market.

"That, of course, must come hand in hand with further improvements in the regulatory system," he said.

Last month, the annual policy-setting Central Economic Work Conference stressed the need to bolster the capacity of domestic regulatory bodies and improve security review mechanisms.