NEW YORK (BLOOMBERG) - BlackRock and Temasek Holdings reached an agreement to start an asset management business in China along with one of the country's biggest banks.

The world's largest asset manager and Singapore's state investor entered a non-binding deal with China Construction Bank Corp to take a majority stake in the new unit, according to a person familiar with the matter. The arrangement would see the overseas firms develop and distribute products for local Chinese investors, the person said.

The deal, laid out in a memorandum of understanding between the investment companies and CCB's wealth management arm, is subject to regulatory approval. It's the latest step by overseas companies to tap China's financial opening, the two year-old policy of improving access for foreign firms to the country's capital markets and investors.

It's the first arrangement of its kind for BlackRock, and comes as the New York-based firm seeks opportunities in China.

Chief executive officer Larry Fink wants his firm to become one of China's leading asset managers, and views the world's second-biggest economy as one of BlackRock's largest avenues for growth, he said in April. About 7 per cent of BlackRock's assets under management came from the Asia-Pacific region at the end of 2018.

A spokesman for BlackRock declined to comment beyond Fink's previous statements. A Temasek representative declined to comment.

Recent regulatory changes in China to increase access to its financial system allow foreign firms to hold 51 per cent of a wealth-management joint venture with a bank.

Despite China's increasing financial openness, US firms including BlackRock have already faced challenges gathering assets for their funds, known locally as private securities funds.

Other foreign financial firms are striking joint ventures in China. UBS Group AG, JPMorgan Chase & Co and Nomura Holdings Inc all won regulatory approval for majority control of their local securities joint ventures.