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JPMorgan Chase Plots China Expansion

The bank's asset management unit is moving deeper into China as the country liberalizes restrictions on foreign firms.

J.P. Morgan Asset Management wants to take a majority stake in China International Fund Management Co., with which it now has a joint venture, as part of JPMorgan Chase's larger initiative to expand its business in China.

The move is subject to approval by Chinese regulatory authorities as well as its JV partner. 

China continues to encourage foreign firms to enter its financial markets. Last month, regulators said non-Chinese companies can own a majority stake of joint ventures in everything from asset management and investment banking firms to insurance companies. 

[II Deep Dive: Why Fund Firms Are Gunning for China]

A November study by Deloitte's fund strategy firm Casey Quirk found that nearly half of the new money added to the global asset management industry will flow into China by 2019. That same year, the country is expected to overtake the U.K. as the world's second-largest market for fund firms, the study found. Assets under management in China are expected to top $17 trillion by 2030, a level reached by the U.S. market in the early 1990s, according to Casey Quirk.

JPMorgan Chase also announced that it filed an application to the China Securities Regulatory Commission to establish a new securities company. J.P. Morgan will initially have a 51 percent stake and expects to own it fully as China changes foreign ownership rules. 

Mark Leung, a 21-year veteran of the company and former co-head of global equities and prime services, is taking over as JPMorgan Chase's chief executive for China. The corporate and investment bank, which hopes to gain business from onshore Chinese clients, said it will double the amount of research it provides on China-listed companies.

"China represents one of the largest opportunities for many of our clients and J.P. Morgan Asset Management globally. It is a critical component of our growth plans, globally and in Asia," said a JPMAM spokeswoman.


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