Late last month, HSBC (HBCYF) received approval from Chinese regulators to take full control of its life insurance joint venture, which was created in 2009 in equal partnership with a Chinese company, under rules that were rolled back in 2020. The bank said the move underscored its “commitment to expanding business in China.”
The British banking giant is also seeking a greater stake in HSBC Qianhai, its joint securities venture in China, according to Reuters, which cited an anonymous source. HSBC declined to comment to CNN Business.
“The sheer size of China’s virtually untapped equity and bond market is irresistible to the world’s large financial institutions, especially since Beijing is finally allowing them to operate wholly owned mutual funds,” said Alex Capri, a research fellow at the Hinrich Foundation.
China is the world’s second biggest market for stocks and bonds. But it’s largely untapped by foreign investors: International holdings account for about 5% of the $14 trillion stock market, and less than 4% of the $17 trillion onshore bond market, according to stock exchange and central bank data.
That started to change last year, after BlackRock (BLK) — the world’s largest asset manager — in June became the first global firm to gain approval for a wholly owned Chinese mutual fund business. Two months later, BlackRock launched its first mutual fund in the country, and quickly raised $1 billion from more than 111,000 investors.
Then, in August, JP Morgan (JPM) became…
