JPMorgan to run China’s first fully foreign-owned futures business

Chinese authorities approve leading US bank’s application


JPMorgan has won approval from the Chinese government to operate the nation’s first completely foreign-owned futures business.

In its decades-long surge to become the second-largest economy in the world, China has pursued a semi-free trade, semi-mercantilist strategy. Thus, foreign firms were required to partner with Chinese companies in 50-50 joint ventures if they wanted to join the nation’s rapidly growing markets.

In recent years, however, as the country has changed from an emerging economy to a developed economy, the attitude of the Chinese government has shifted.

Tesla Inc can be said to be a notable example of this change. Last year the American firm was allowed to build and operate a wholly owned giga-factory in Shanghai. At the same time, the ruling Communist Party of China (CPC) scaled back its subsidies for Chinese electric car manufacturers.

At the start of 2020, caps on the foreign ownership of futures companies were scrapped.

In a statement, the China Securities Regulatory Commission (CSRC) said that the Chinese approval of JPMorgan would hopefully bring in more qualified foreign players.

Having first started business in China in 1921, JPMorgan’s Chinese banking unit had total assets of around $6.6bn. Its securities firm had more than $110bn of capital.

Jamie Dimon, the CEO of the largest bank in America, recently affirmed his commitment to bring JPMorgan’s “full force” to China. This enthusiasm can be seen in the bank’s commitment in April to double its stake in a Chinese mutual fund venture and recent expansions of its Shanghai workforce.

In mid-morning Thursday trading (EDT), JPMorgan Chase & Co stock traded up 0.12 per cent at $99.60, down more than 28 per cent since the start of the year.

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