Foreign institutions rev up layouts in China as capital market opens wider

Photo taken on Sept. 30, 2020 shows the street view of the Lujiazui area of Pudong, east China's Shanghai. (Xinhua/Wang Xiang)

With the continuous opening-up of the Chinese capital market, an increasing number of foreign institutions are moving faster to expand business in China since this year, reported China Securities Journal Monday.

J.P. Morgan announced on August 6 that its file for turning J.P. Morgan Securities (China) Company Limited, a sino-foreign joint venture securities firm, to its wholly-owned subsidiary has won the approval of the China Securities Regulatory Commission (CSRC). J.P. Morgan Securities (China) Company Limited will be the first securities firm in China that is wholly owned by foreign capital.

On the same day, Standard Chartered Bank (HK) Limited's application for establishing a securities company was accepted by CSRC.

Other foreign-controlled securities firms winning the approval of CSRC include Nomura Orient International Securities Co., Ltd., Daiwa Securities (China) Co., Ltd., DBS Securities (China) Co., Ltd., UBS Securities Co. Limited, Credit Suisse Securities (China) Limited, and Morgan Stanley Securities (China) Co., Ltd., etc..

Goldman Sachs Gaohua Securities Co., Ltd., a joint venture securities company co-established by U.S. investment bank Goldman Sachs and Chinese firm Beijing Gaohua Securities Co., Ltd., was approved by CSRC on July 28 to engage in alternative investment business through subsidiaries, but limited to following others in Science and Technology Innovation Board and Growth Enterprise Market investment.

In terms of public offering funds, Fidelity Fund Management (China) Co., Ltd. was approved for establishment by CSRC on August 6, becoming the second wholly foreign-owned public fund management company in China after BlackRock.

The foreign institutions' zest of entry into the Chinese market is attributed to the accelerating opening-up of the Chinese capital market, said Chen Li, chief economist with Chuancai Securities based in Chengdu of southwest China's Sichuan Province.

On the one hand, Chen noted, the threshold for foreign investment has continued to be lowered, greatly easing the layouts of the Chinese assets by foreign investors and improving their investment enthusiasm, and on the other hand, enterprises with development prospects are mushrooming under the IPO registration system, attracting increasing attention from foreign institutions.