Announcement of deal with big US bank marks the latest sign of increased openness by Beijing to participation by foreign financial heavyweights
(AF) Goldman Sachs has won preliminary approval from Beijing for a wealth management joint venture (JV) to serve customers in China.
The venture aims to serve some of the estimated $70 trillion in investible assets expected in Chinese households by 2030, Goldman said.
Goldman’s asset management division will own 51% of the JV and a subsidiary of the state-owned Industrial and Commercial Bank of China will own the rest.
The industry is regulated by the China Banking and Insurance Regulatory Commission. Goldman said that the partnership had preliminary approval from the CBIRC.
Wealth management products in China are typically distributed through the domestic banking network, pushing foreign asset managers into partnerships with local banks.
The announcement marks the latest sign of increased openness by Beijing to participation by foreign financial heavyweights.
JPMorgan Chase was authorised in December 2019 for a majority holding in a trading joint-venture in China, followed a few months later by a similar announcement from Morgan Stanley.
BlackRock, the world’s biggest asset manager, this month said it had received permission to start a wealth management joint venture with China Construction Bank and Singapore’s state fund Temasek.
“China’s wealth management industry has grown on the back of increased household wealth and continued financial market reform,” Tuan Lam, head of client business for Asia Pacific ex-Japan at Goldman Sachs Asset Management, said.
“This joint venture with China’s preeminent financial institution will accelerate our objective of establishing a leadership position in one of the world’s largest, fastest-growing wealth management opportunities.”
With reporting by Agence France-Presse