BlackRock wins Chinese approval for mutual fund business

BlackRock has received approval to start running its own mutual fund business in China, as the world’s largest asset manager cements its presence in the country’s fast-growing investment industry.

The US group said on Friday that China’s Securities Regulatory Commission approved the application of a wholly owned fund company BlackRock.

The move came on the heels of a flurry of activity by major US banks and asset managers as they seek to do so more integrated themselves in the Chinese financial system and benefit from its vast pool of savings, which have historically been geared toward cash and property.

Bigger foreign participation Driven by the Chinese government’s reforms related to the liberalization of the financial system. This has gained momentum despite the tense geopolitical relations between the United States and China over the past year.

“China is taking important steps to open up its financial markets,” said Larry Fink, BlackRock’s president and CEO. “We are honored to be in a position where we can support more Chinese investors to access the financial markets and build portfolios that can serve them throughout their lives.”

The go-ahead comes weeks after BlackRock received a file separate consent For a wealth management project with China Construction Bank, through which investment products will be designed to be distributed through local banks.

The company said the approvals reflect the multiple avenues available to foreign groups entering China and “position BlackRock to expand its range of products, services and investment insights to all customer segments across China.” China’s asset management market was worth 121.6 trillion renminbi ($19 trillion) last year, according to Boston Consulting Group and China’s Everbright Bank.

Where April 2020, foreign companies were allowed to fully own the mutual fund business in China, a shift from a previous requirement to operate through a joint venture with a local partner. JPMorgan in the process of Buying its joint venture partner In the mutual fund business in China.

Greater foreign ownership is also permitted in sectors including mainland securities firms, which are involved in underwriting debt and equity. Last week, JPMorgan Apply to get full control From its joint venture in the stock, following a similar move before Goldman Sachs in December.

The country’s wealth management industry, which is dominated by a state-owned banking sector and is the world’s largest by assets, has also undergone reforms to encourage foreign intervention as China seeks to develop its savings industry.

Goldman Sachs announced last month that it was Partnership with ICBC, one of the largest banks in China with 680 million retail customers, to launch a majority-owned wealth management venture. Amundi, French asset manager, last year Launch a partnership with the Bank of China.

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