(China Alert) Your own China business: how will you react?
- HNWI, WFOE
-CSRC has approved the first foreign majority-owned FMC
-Chinese mutual funds are only one industry in which this change is occurring
-Full foreign ownership will not be restricted to Hong Kong firms
Update: Hang Seng’s majority-owned Chinese fund management company was approved last week. Z-Ben Advisors believes this is just the tip of the spear in what is a wider relaxation of foreign ownership. Majority control of mutual fund companies onshore is a boon for full operational capability covering the widest scope of options for money management in China: retail, HNWI, institutional and even international clients can all be serviced. Institutions and retail investors are the largest untapped fundraising opportunity in global asset management and we believe firms need to weigh these options in order to fully realize the potential of this USD11.5tr market (and that’s just onshore). Wide-spread majority ownership should be realized as early as next year.
Our prediction for majority ownership onshore goes far beyond Hang Seng, which utilized the Closer Economic Partnership Arrangement (CEPA) between Hong Kong and the Mainland. Hang Seng is a…
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