The world’s largest asset manager, which holds $8.67 trillion in assets under management as of January 2021 will now operate in a wealth management business in mainland China. The company received the license to begin its operations in China as there is massive growth in the Chinese investment market.
The new business is a joint venture where BlackRock is partnering with China Construction Bank and Singapore’s state fund Temasek however, Blackrock owns 50.1 percent of the new venture. As per an announcement on Wednesday the China Banking and Insurance Regulatory Commission approved operations of the new business. Blackrock’s investment will be in the domestic assets while the China Construction Bank will support distribution.
Due to the booming Chinese market, many international investment companies intend to capitalize on expanding markets. The Chinese wealth market is growing at a rapid pace with unbelievable opportunities to expand businesses with a market worth of $18.9 trillion in 2020. With the enormous market, china offers an opportunity for businesses from all over the world to achieve long-term goals. As the world is gaining pace towards economic rebound the liberalizing of the market is a growth prospect for companies looking for diversification.
Last year the first foreign company that tapped the growing wealth market in China was Amundi that launched its majority-owned wealth management venture on September 30 in Shanghai. The Chinese government brought changes to the policies by removing the implicit guarantees on principals and return rates. The Chinese government allowed international companies to take ownership of their mutual fund companies which attracted several international companies’ interest. International buyers plunged to incentivize the futures markets as the rules were eased.
Although the political worries continue between China and the US, as the markets are open for businesses in China, companies like JPMorgan Chase announced their complete ownership in the Chinese fund business in addition to taking a stake in China Merchants Bank’s wealth unit. The Chinese reforms in the fund management business are to allow the global companies to enter the market. Recently china released rules for Wealth Management Connect leads to massive growth in international investments between Hong Kong and southern China.