Aberdeen Asset Management has taken a significant step in making further inroads into China by securing a license to operate as a standalone business in Asia’s leading economic powerhouse.
The agreement was announced during an official visit to the country aimed at fostering trade and investment links, led by Chancellor George Osborne.
The company, which currently has a “representative office” on the mainland in Shanghai said the agreement meant the FTSE-100 company could established a full service office there. The group also offices in Hong Kong.
The firm is already one of the UK’s most active investors in Asia and manages around £80billion in Asian assets for a range of institutional and retail investors.
But the firm’s fortunes have been hit recently by turbulence affecting the Chinese economy.
Chinese shares suffered heavy losses over the summer, prompting the authorities into a series of measures to try to reassure investors.
Martin Gilbert, Aberdeen’s chief executive, underscored the importance of the country’s long term outlook. He said: “UK business cannot ignore the structural development of China.
“It is already the second largest economy in the world and will sooner or later surpass the US.
“The work undertaken to obtain a WFOE licence is part of our overall strategy to ensure Aberdeen Asset Management is well placed for the next 10 to 20 years.”
Economic Secretary to the Treasury, Harriett Baldwin, who was accompanying Mr Osborne on the mission said Aberdeen’s license to operate as a wholly foreign-owned enterprise was an “important step” for the firm.
“This is an important step for an established British firm and will help to increase the links between our financial services industries,” she said.
Sajid Javid, Secretary of State for Business, said: “As we deepen UK-China relations it is rewarding to see Aberdeen Asset Management licensed to operate in China. The company will bring fund management expertise from the UK to the second largest economy in the world. I am committed to building relationships like this between our two nations.”
China agreed to allow qualified, locally-incorporated wholly foreign-owned or joint-venture private fund management institutions to engage in private security management businesses according to domestic regulations as a part of negotiations around the 7th UK-China Economic and Financial Dialogue.