BLACKROCK Inc. has become the first global asset manager allowed to start a wholly owned mutual fund business in China, as the government opens up the country’s US$3.5 trillion mutual fund industry. BlackRock, the world’s largest asset manager, was granted a license from the China Securities Regulatory Commission (CSRC) to start selling onshore investment products and solutions to Chinese investors, the firm said in a statement Friday. China scrapped foreign ownership caps in its mutual fund and securities sectors April 1, 2020. The approval comes a month after BlackRock was given the nod to pursue a joint venture asset management business along with China Construction Bank Corp. and Singapore’s Temasek. Together, the two entities give BlackRock an edge to reach more investors in China, as it competes with a slew of global institutions going after an asset pool. “China is taking significant steps in opening up its financial markets. We are honored to be in a position in which we can support more Chinese investors access financial markets,” BlackRock CEO Larry Fink said in a statement Friday. Several global asset managers, including Neuberger Berman, Schroders PLC and Fidelity International, have also applied to set up wholly owned mutual fund businesses in China. But some others have balked at entering a market congested with roughly 150 players. In March, U.S. money manager Vanguard Group dropped plans to obtain a mutual fund license in China, citing a “crowded” market. Still, China’s mutual fund market is likely to triple to 60 trillion yuan (US$8.75 trillion) in a decade, forecast Shanghai-based fund consultancy Z-Ben Advisors. “It now comes down to how these global groups actually roll out the businesses in the next several years,” said Z-Ben managing director Peter Alexander. For BlackRock, being first “gives it a head start among global managers,” said Sun Guiping, an analyst with Shanghai Securities Co. The U.S. investment giant will also benefit China’s mutual fund industry by bringing in more product offerings and expertise, he said. More wholly foreign-owned or controlled mutual fund firms will emerge as China’s opening up continues, Sun said. Their joint ventures already occupy 11 spots among the top 20 largest fund managers in China, excluding money-market funds, he added. Investable assets in China are set to surpass US$70 trillion by 2030, with about 60 percent to be allocated to non-deposit products such as securities, mutual funds and wealth management products, according to Goldman Sachs research. New York-based BlackRock oversaw more than US$9 trillion globally as of March 31. (SD-Agencies) | 