US-based investment bank JPMorgan Chase & Co announced plans to significantly increase its investments in China. The bank claimed that it will be boosting its asset management, securities, futures, and options operations in China to take advantage of the country's further opening of its financial sector.
Apart from increasing its investments, JPMorgan also revealed that part of its plans will be to hopefully gain full ownership of its Chinese joint ventures. The company clarified that it is still waiting for the right time to take over its Chinese joint ventures.
JPMorgan China CEO Mark Leung mentioned that the company decided to boost its investments in China given the passing of new regulations that now provide new opportunities. Leung stated that the new rules have made the business environment very favorable to foreign players. These rules include the establishment of various stock connect programs and the inclusion of Chinese equities and bonds in global indexes.
One of the key regulations that had resulted in the company's decision is China's lifting of foreign ownership limits for Chinese business. Under the new regulation, foreign firms may now own 100 percent of their Chinese joint ventures. JPMorgan plans to take full advantage of this new rule and leverage its strength and global network to enhance its business in China.
JPMorgan currently owns a 51 percent stake in its securities joint venture in China. The bank has reportedly finished all of the preparatory work for the launch of the joint venture and is now just waiting for final permission from the Chinese Securities Regulatory Commission. Once launched, the joint venture will engage in businesses such as securities sales, research, and investment banking.
As for its existing operations in China, JPMorgan announced plans to increase its investments in its asset management unit, JP Morgan Asset Management (JPMAM). The company's asset management unit is already poised to become China's first foreign assets management firm to hold a majority stake in a Chinese mutual fund. In August, JPMAM managed to win an auction bid for an additional 2 percent stake in its mutual fund joint venture, China International Fund Management.
As part of its China strategy, JPMorgan's asset management firm has also recently formed a new partnership with China Merchants Bank. The partnership aims to offer JPMAM's products to China Merchants Bank's asset management subsidiary. JPMAM's products will serve as complementary offerings to China Merchants Bank's investment portfolio.
JPMorgan currently has similar partnerships with other Chinese banks, including the Industrial and Commercial Bank of China, the Bank of China, and the Postal Savings Bank of China. According to Leung, JPMorgan has long been referred to as the bank for other banks. The company plans to strengthen its position with the establishment of new partnerships with other Chinese financial institutions.
