A growing number of foreign financial firms have applied to establish and expand their operations in China this year, drawn by the country's increasingly open financial market.
China's central bank announced at a recent meeting with foreign financial institutions that the country will steadily promote institutional opening up of the financial service sector and the financial market, and expand connectivity between domestic and overseas financial markets.
A prime example of this trend is Allianz Global Investors Fund Management Company, a public fund management firm that is owned by Germany's Allianz Global Investors, which has successfully entered the Chinese market, capitalizing on the country's supportive policies.
"China's economic transformation, coupled with global technological advancements, has created a wealth of investment opportunities," said Cheng Yu, head of the company's research department.
"We received approval from the China Securities Regulatory Commission (CSRC) on April 18 to establish a public fund management company. The entire process was incredibly smooth, and in just eight months, we received approval. This might be the fastest among foreign institutions, reflecting the high-level market openness China supports," said Leo Shen, the company's general manager.
Beyond public funds, several foreign brokerages and private equity firms are also expanding in China. In March, Standard Chartered officially launched its securities business in Beijing, followed by BNP Paribas, which was granted approval by the CSRC to establish a wholly foreign-owned securities firm in April. Meanwhile, Citigroup and Mizuho Securities are awaiting approval to enter the market.
"We've been heavily invested in China for many years. The Chinese market is crucial to our global strategy. We hope to support our Chinese clients in financing, particularly cross-border financing," said Zeng Jizhi, financial market head of Standard Chartered's Greater China and North Asia region.
In March, U.S.-based Neuberger Berman completed its third capital increase since establishing operations in China, raising its registered capital from 300 million yuan (about 41 million U.S. dollars) to 420 million yuan (about 57 million U.S. dollars). The firm has also launched three new products this year, bringing its total number of managed funds to eight.
"We've mapped out a long-term investment and development plan. We are highly confident in the development of China's capital markets and the long-term returns they will offer global investors," said Willian Xu, head of institutional business at Neuberger Berman in Shanghai.
According to available data, a total of 24 globally significant banks have established operations in China. The country now hosts 19 foreign-invested securities firms, 51 foreign-invested fund management companies, and 858 qualified foreign institutional investors.
Foreign financial firms expand in China amid policy support
