China has taken what it called a major step toward opening up its financial industry, with a promise to ease limits on foreign ownership of banks and securities firms.
The announcement follows a visit to China by US president Donald Trump which was dominated by trade issues.
A Chinese cabinet official appeared to respond to mounting US and European complaints that Beijing hampers foreign activity in a variety of industries in violation of free trade commitments.
The American Chamber of Commerce in China, which has appealed to Beijing to ease market barriers, said it looked forward to seeing details of the latest changes.
The announcement followed a series of multibillion-dollar contract signings with American companies during Mr Trump's visit, in a tradition aimed at blunting criticism of Beijing's trade surpluses and market barriers.
China will lift its limit on foreign ownership of securities, fund management and futures companies from a minority stake of 49% to a majority stake of 51% and end restrictions after three years, the Chinese official, Zhu Guangyao, said at a news briefing.
He said a similar change would be made for life insurance companies and those would end in five years.
Regulators also will abolish restrictions that limit a single foreign investor's stake in a Chinese bank to 20% and cap total foreign ownership of any institution at 25%, Mr Zhu said.
"In other words, foreign owners can have full ownership of such companies" after three to five years, he said. "This opening up is decisive and the effect will be far-reaching."
Beijing will also gradually reduce tariffs on automotive imports, Mr Zhu added.
The announcement came hours after Mr Trump left Beijing to attend an Asia-Pacific economic meeting in Danang, Vietnam.
Asked about the timing of the changes announced on Friday, Mr Zhu cited Chinese president Xi Jinping's comments at the ruling Communist Party's twice-a-decade congress last month.
Mr Xi promised freer markets, but also emphasised that Beijing wants to build up state-owned companies that dominate finance, energy and other industries.
American, European and other foreign companies complain that despite official pledges to open China's economy, they are hampered by ownership limits and other restrictions in finance, health care and other promising industries.
William Zarit, chairman of the American Chamber of Commerce in China, said: "I look forward to seeing the details, as opening up the financial sector in particular could greatly improve the allocation of financial resources and support China's future development.
"These restrictions, and many others yet to be addressed, have been hindering economic activity in China for far too long."