“China’s mutual fund industry is at a turning point,” says Ting Li, State Street Global Advisors’ head of Asia, excluding Japan. And the future is looking brighter because of some imminent liberalization moves, industry executives say.

The Chinese authorities are preparing to implement a revised investment fund law that promises to give fund management companies — both domestic firms and joint ventures with foreign partners — a boost. Effective from June 1, the legislation will relax restrictions on the origination and approval of new funds and allow mutual fund companies to compete for a bigger slice of China’s growing wealth-management market.

For SSGA, the asset management arm of Boston-based State Street Corp., the new regime is an irresistible lure. Last year the company teamed up with Zhongrong International Trust Co., a finance company controlled by Hong Kong–listed Jingwei Textile Machinery Co., to apply to the China Securities Regulatory Commission to form a fund management venture in which SSGA would own 49 percent, the most a foreign investor is allowed. They expect to win approval for the venture later this year. “It’s the right time for us to participate,” Li said.....