China and the US agreed yesterday on specific steps for foreign companies to enter China's financial service industry following two-day high-level economic talks in Beijing. China said it would complete a study of foreign equity participation in the banking sector by the end of 2008 and make relevant policy recommendations. Foreign-invested companies, including banks, will be allowed to issue Renminbi-denominated stocks and bonds, while mutual funds administered by Chinese banks are to be allowed to invest in the US stock market, according to a statement from the US government. China will also resume licensing of new joint-venture securities companies and allow foreign securities firms to expand their operations in China to include brokerage, proprietary trading and fund management, though state media said a 33.33 per cent stake cap will likely remain in place for the near term. Beijing said in May it planned to resume issuing licences for securities ventures in the second half of the year after a two-year overhaul of its once-troubled brokerage sector. Several foreign firms, including some US firms, are already in advanced stages of establishing new joint ventures. Last week, Credit Suisse signed a memorandum of understanding to establish a strategic relationship with China's Founder Securities, while Morgan Stanley signed an agreement with China's Fortune Securities. Shortly before the talks opened, China raised the quota for qualified foreign institutional investors, which allow foreign mutual funds to invest in China's domestic stock market, from $10 billion to $30 billion.