BEIJING • China has approved a wealth management joint venture between American asset manager BlackRock, Singapore's investment company Temasek and China Construction Bank, as China gradually opens up its financial sector to international firms.
The announcement, which confirms what people with direct knowledge of the matter told Reuters last December, was announced on the website of the China Banking and Insurance Regulatory Commission (CBIRC) last Saturday.
The article gave no further details about the venture or what services it would be offering.
The deal comes as China's government looks to open up its financial market to foreign firms, offering potentially rich rewards for international fund managers and others in the broader financial sector.
Top global financial players have long sought to increase their presence in the relatively fast-growing Chinese economy.
Last October, China scrapped some restrictions on foreign banks' operations in the country.
Two months later, France-based Amundi - Europe's largest asset manager - and Bank of China Wealth Management won approval to set up a joint venture, while banks such as UBS and JPMorgan Chase have been allowed to set up majority-owned China ventures.
But the Chinese industry remains dominated by domestic state firms and China has yet to open up some more sensitive areas of its financial industry.
CBIRC said more foreign financial institutions are expected to join or expand in the Chinese market, and are doing their due diligence before entering. Some have submitted preliminary applications to open a unit, it said.
"It is expected that more foreign institutions will participate in China's financial market in the coming period and become a viable force for the high-quality development of China's financial industry," CBIRC said.
A CBIRC spokesman also said in an interview published on the watchdog's website last Saturday that China will provide support for its financial institutions which are doing business in Hong Kong, while complying with regulations and offering services to residents and companies.
CBIRC pledged its backing for Hong Kong as a finance hub and reiterated a commitment to opening up the Chinese financial sector amid a deepening stand-off with the United States.
Tensions between the US and China over Hong Kong have sparked tit-for-tat sanctions on politicians and officials on both sides that have left global banking institutions walking a tightrope between the two world powers.
A new national security law has fuelled concerns about the state of Hong Kong's autonomy from China, including freedom of the press and the independence of its judicial system. Both have helped underpin Hong Kong's reputation as a global financial hub.
The US has also ended preferential trading treatment for the city, which President Donald Trump and his team say was now essentially just another Chinese city.
CBIRC said: "At present, Hong Kong's financial market is generally operating smoothly, and the linked exchange rate system has a solid foundation, which also reflects the confidence of the international market in Hong Kong.
"Hong Kong's status as an international financial centre will not be weakened and shaken, but it will become more prosperous and stable in the future."
REUTERS, BLOOMBERG
