BlackRock has received approval to start managing its own mutual fund company in China, as the world’s largest asset manager increases its presence in the rapidly expanding investment industry.
China’s Securities Regulatory Commission has approved the application for a fund company wholly owned by BlackRock, the U.S. group said Friday.
The move followed a wave of activity from major US banks and wealth managers as they searched. integrate more fully themselves in China’s financial system and benefit from its vast pool of savings, which have historically been directed toward number and ownership.
A large foreign participation it has been spurred by Chinese government reforms in relation to the liberalization of the financial system. These have gathered momentum despite strained geopolitical relations between the United States and China over the past year.
“China is taking important steps to open its financial markets,” said Larry Fink, president of BlackRock and CEO. “We are honored to be in a position where we can support more Chinese investors accessing financial markets and building portfolios that can serve them for a lifetime.”
The move comes weeks after BlackRock received one separate approval for a wealth management company with China Construction Bank, through which it will design investment products that will be distributed via local banks.
The approvals reflect the multiple routes available to foreign groups entering China and “position BlackRock to extend the breadth of its products and services and investment insights to all customer segments across China,” the company said. . China’s asset management market was worth Rmb121.6tn ($ 19tn) last year, according to Boston Consulting Group and China Everbright Bank.
Then April 2020, Foreign companies have been allowed to fully own mutual fund companies in China, a step from a previous requirement to operate through a joint venture with a local partner. JPMorgan is in the process of including their joint venture partner in its mutual fund activity in China.
Greater foreign ownership is also allowed in sectors including continental security companies, which are involved in the underwriting of debt and equity. Last week, JPMorgan applied to take complete control of their security joint venture, following a similar move by Goldman Sachs in December.
The country’s wealth management industry, which is dominated by a public banking sector that is the world’s largest in operation, has also undergone reforms to encourage foreign participation as China seeks to develop its savings industry.
Goldman Sachs announced last month that it was in collaboration with ICBC, one of the largest Chinese banks with 680 million retail customers, to launch a majority-owned wealth management company. Amundi, the French wealth manager, last year has launched a collaboration with Bank of China.