Lobbyists for the financial services industry are in Beijing this week urging China’s No. 2 central banker and other top regulators to open the country’s banking, securities and insurance sectors to more foreign competition.

The discussions, which will span three days beginning on Wednesday, will coincide with separate meetings between Chinese officials and a handful of Republican and Democratic staff from the House Financial Services Committee.

“We are in the position of being on the side of the angels here. If you look at economic history, there’s literally no developing country that was able to make the transition to developed status without creating an advanced capital market,” argued Nick Ronalds, the executive director of the Asia branch of the Futures Industry Association, one of five trade groups that will attend the meetings.

The lobbyists will meet with the vice minister of the People’s Bank of China, Wu Xiao Ling, and the chairman of the Chinese banking regulatory commission, Liu Mingkang. They will also meet with Sun Xiao Xia, the director general of the Ministry of Finance.

The trip is timed ahead of Treasury Secretary Henry Paulson’s and other cabinet members’ visit to Beijing next month for high-level talks on a range of economic issues.

Aside from the futures industry group, representatives from the Financial Services Forum, the Financial Services Roundtable, the American Council of Life Insurers (ACLI) and the Securities Industry and Financial Markets Association (SIFMA), Wall Street’s main lobby in Washington, will participate. The Forum, which represents 20 chief executives from the financial industry, took the lead in organizing the trip.

The lobbyists’ first goal is to convince the regulators to lift the foreign ownership caps in the Chinese financial sector. At present, a foreign firm can own only up to a 20 percent stake in a Chinese bank, and there are similar limits on ownership of Chinese securities and insurance firms.

They will also urge regulators to allow more input from the private sector in the regulatory process and to ease restrictions on setting up new branches and licensing products.

The meetings of the Capitol Hill staff were planned to allow the aides to learn firsthand from Chinese officials about the currency and trade issues straining the U.S.-China relationship, according to a spokesman for the Financial Services Committee.

The trade groups did not organize the staffers’ meetings or fund their travel. The lobbyists said they briefed lawmakers and top administration officials of their trip but did not coordinate with them in any substantial way.

The trade groups argue that allowing greater market access for foreign firms will help China achieve its own goal of spurring more domestic consumption.

Chinese households currently save between 35 and 50 percent of their income. But with more access to insurance, mortgage and banking products, they might consume more and save less, helping to lessen China’s reliance on export-driven growth, the lobbyist argued. That, in turn, could ease tensions with the U.S. over the two countries’ huge trade gap and Beijing’s currency policy.  

“One point we will make is that as they modernize the marketplace, that will help the trade imbalance and the currency,” Rob Nichols, the Forum’s president, said.

He added, “We want to be helpful, we want to be a colleague.”

The Chinese market presents a huge opportunity for U.S. financial firms. China lags behind the West in the array of financial and retirement products available to consumers. Chinese firms also lack access to many of the sophisticated derivatives and hedging instruments available in developed countries.

As a result, there is about $2 trillion in “mattress money” in China, estimates David Strongin, managing director at SIFMA, who will participate in the meetings. “We’d like to unleash that capital,” he said.

The lobbyists cited China’s reluctance to introduce more foreign competition in their financial sector as the biggest obstacle. “Domestic participants aren’t necessarily eager to face additional competition,” Ronalds said.

Ben Carliner, the director of research at the Economic Strategy Institute in Washington, said that the Chinese would benefit from more sophistication in their financial sector but warned that the pace of any reforms would be slow.

Internal forces, rather than prodding by foreigners, would spur the changes.

“They’re happy to talk to the Americans who are going there and, if they have something they want, they’ll take it. But they’ll do it because of their own domestic pressures,” he said.