Shanghai says global financial giants investing despite virus

SHANGHAI/BEIJING (Reuters) – Some of the world’s top financial institutions, including BlackRock and JPMorgan (NYSE:), are increasing investments in China’s financial hub Shanghai, undeterred by the novel coronavirus outbreak, the city government said on Friday.

Shanghai also held an online opening ceremony for local branches of five global institutions including JPMorgan, Invesco and Russell Investment.

“In such a special situation where the city is making all efforts to combat the coronavirus, the ceremony shows the world Shanghai’s determination to further open its financial industry,” the Shanghai Municipal Office of Finance Service said in a statement.

It also shows global financial institutions have confidence in Shanghai, it said.

As the virus spreads globally, Shanghai has stepped up screening of inbound travellers to prevent them importing new cases, raising concerns the pace of China’s financial liberalisation could be slowed.

As part of the interim Sino-U.S. trade deal signed last year, China will scrap foreign ownership caps in the mutual fund and brokerage industries on April 1.

The Shanghai government said foreign financial institutions are actively preparing to run wholly-owned businesses in Shanghai.

Global asset managers, including BlackRock (N:), Fidelity International, Neuberger Berman and Schroders (L:) plan to set up mutual fund units in Shanghai and will submit applications once rules allow, the statement said.

In the brokerage sector, the Singaporean bank DBS (SI:) has applied to set up a majority-owned securities venture in the city, while Morgan Stanley (N:) plans to raise its stake in its Chinese brokerage venture to 51% from 49% now.

In addition, several financial institutions plan to set up wholly-owned brokerage units in Shanghai as soon as ownership restrictions are scrapped.

“China represents one of the largest opportunities for many of our clients and is a critical component of JPMorgan’s growth plans in Asia Pacific, and globally,” Filippo Gori, CEO for JPMorgan, Asia Pacific, said in a separate statement announcing the opening of its majority-owned Chinese brokerage venture.

Other foreign businesses that open on Friday include the Shanghai units of Korean Reinsurance Co, Invesco, Russell Investment and Greenlight Capital.

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