While the tensions between the US and China are still simmering over #TikTok, the security law imposed over Hong Kong, and companies that are said to be involved in the violation of human rights, the banking sector is cozying up in mainland China.
BlackRock, the largest investment management company based on assets, is now the first asset manager to receive approval to set up a mutual fund unit in China. It marks the entry of an American asset manager in a sector worth more than $2.58 trillion.
The China Securities Regulatory Commission (CSRC) green-lighted BlackRock to set up a subsidiary in Shanghai. CSRC stipulated in its statement that BlackRock has six months to set-up its unit. BlackRock, which already has a mutual fund venture with Bank of China, will secure its position in the Chinese fast-growing #asset management market.
This became possible under the trade deal signed by China and the US at the beginning of the year. BlackRock’s move has been followed suit by Neuberger Berman, Fidelity International, and Schroders.
Shanghai seems to be the city of choice when establishing new units; the Vanguard Group has announced that it will relocate its Asian headquarters in the town of magnolias upon closure of its Japan and Hong Kong operations.
Currently, BlackRock stock price is trading 0.12% higher.
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Sources: reuters.com, cnbc.com