J.P. Morgan aims to control his Chinese joint venture

07/08/2019

 

Since China has eliminated the limits of corporate ownership, many foreign companies have decided to invest in the world’s second largest economy

 

JPMorgan Chase & Co., an American multinational investment bank and financial services company headquartered in New York City, could become the first foreign company to take control of its Chinese asset management joint venture. The goal of the American bank is to expand its market share in the second largest economy in the world.

In particular, according to data from the Shanghai United Assets and Equity Exchange, J.P. Morgan paid CNY 241.3 million (USD 34.3 million) to Shanghai International Trust to purchase a 2% stake in China International Fund Management. Prior to this, the New York-based company already had 49 percent of its own capital.

 

According to the rules implemented in 2017, foreign companies are able to purchase 51% of the capital of their Chinese joint ventures

 

This is a time of opportunity for foreign companies. In fact, China wants to open up to the world market and to global investors and has taken various measures to give more power to these foreign companies. Last month, for example, Premier Li Keqiang announced that China will eliminate all ownership limits of Chinese mutual fund companies within the next year, a year earlier than expected.

To Yicai Global Dan Watkins, managing director of the Asia Pacific asset management branch of J.P. Morgan said: “We look forward to the next steps to proceed with this acquisition, working closely with our joint venture partners”. The agreement still requires regulatory approvals by the United States and China, he added.

 

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