Eight months after first establishing a partnership, the establishment of a wealth management joint venture between Blackrock, Temasek and China Construction Bank has been approved by regulators.
Approval was announced on the China Banking and Insurance Regulatory Commission's (CBIRC) website over the weekend but no additional details about the business were provided.
This follows initial reports in December 2019 of the trio signing a memorandum of understanding to allow the U.S.’s Blackrock and Singapore’s Temasek to take a majority stake in the business. Separately, CCB also signed a tie-up with BlackRock for more collaboration in investments, asset management, risk management and fintech.
The latest approval of more foreign entrants is part of a historic reform of China’s estimated $45 trillion financial services industry. The country announced last year that it would scrap ownership caps this year for futures, securities, and mutual fund companies.
Accelerated Expansion
Despite ongoing U.S.-China tensions and a pandemic, a handful of foreign firms have remained committed to a mainland expansion. For example, UBS met its target to double mainland headcount to 1,200 ahead of schedule in February this year with further plans to double the headcount of its majority-owned investment banking joint venture in three years – from the current 400. HSBC recently said it was also on schedule to hire 2,000-3,000 wealth planners in the mainland over the next four years.
Elsewhere, mainland acceleration is occurring at the cost of Hong Kong which continues to undergo political uncertainty with Japan’s Daiwa Securities as one such case.
«If facts emerge such as people getting arrested one after another [in Hong Kong], we may need to front-load it,» said Daiwa’s deputy president Keiko Tashiro. «Once the joint venture is established, we can do China business in China.»
