Photo taken on Nov. 3, 2020 shows the view of the Lujiazui area of Pudong, east China's Shanghai. (Xinhua/Ding Ting)
BEIJING, Oct. 21 (Xinhua) -- As China continues opening-up of its financial sector to the outside world, more foreign institutions are coming to invest in the country's wealth management market, reported the Xinhua-run China Securities Journal.
Some of them turn to set up joint ventures (JVs) in partnership with Chinese banks, while others make strategic investments in them.
For example, BNP Paribas Asset Management under the international bank group BNP Paribas, and the Agricultural Bank of China (ABC, 601288.SH), one of the country's largest commercial lenders, will set up a wealth management JV. Having got approval from the China Banking and Insurance Regulatory Commission (CBIRC), the two sides will complete preparatory work and start business as soon as possible, according to an announcement released by ABC on Wednesday.
So far, there are four asset management JVs in China, including Amundi BOC Wealth Management, BlackRock CCB Wealth Management, Schroders BOCOM Wealth Management, and Goldman Sachs ICBC Wealth Management.
Among them, Amundi BOC Wealth Management, BlackRock CCB Wealth Management, and Schroders BOCOM Wealth Management have conducted business. Statistics showed that by the end of June, Amundi BOC Wealth Management, BlackRock CCB Wealth Management, and Schroders BOCOM Wealth Management had launched 132 products, 8 products and 3 products in the Chinese market, with a wealth management scale of 80.892 billion yuan, 3.41 billion yuan and 3.01 billion yuan, respectively.
Setting up wealth management JVs with Chinese banks are attractive to foreign institutions, as JVs can issue both publicly and privately offered products. They are also empowered by the distribution channels of Chinese banks, according to Zhou Yiqin, a senior financial regulatory policy expert.
Meanwhile, wealth management JVs can bring advanced investment culture, market mechanisms, diversified products and risk control concepts to China, which is conducive to improving the domestic industrial ecology, said Zhou.
In addition to establishing JVs, some foreign institutions choose to enter the Chinese wealth management market by making strategic investment.
In May, China Merchants Bank (CMB, 600036.SH) announced that its wealth management unit CMB Wealth Management had received 2.667 billion yuan of equity investment from J.P. Morgan Asset Management. The deal made J.P. Morgan Asset Management become the second largest shareholder of CMB Wealth Management.
The moves by foreign investors, whether to work with Chinese banks, engage in cooperation talks or look for opportunities, all mirror their confidence in the long-term development of the Chinese market. The actions are also the best recognition of China's financial opening-up policy, said Zhou. (Edited by Su Dan with Xinhua Silk Road, sudan@xinhua.org)
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