The Commonwealth Bank of Australia (CBA) is to establish a funds management joint venture in China, the bank has announced.
CBA's fund management arm, Colonial First State Global Asset Management, has become the first Australian fund management group to be given approval from Chinese regulators to form the venture, which will be with Cinda Asset Management Corp, a state-owned Chinese company.
The new fund management enterprise will be based in Shenzhen in Southern China, one of the country's main financial centres.
In a statement CBA said: "The initial focus of the joint venture will be on managing retail funds invested into domestic asset classes – Chinese equities and fixed income."
CBA added that deregulation of the Chinese markets would aid the flow of foreign investment into the country.
"It is expected that further deregulation will allow additional offshore investment. This will enable the joint venture to leverage off the global investment expertise of Colonial First State Global Asset Management," it said.
The move by the Chinese Securities Regulatory Commission (CSRC) to allow the venture signals China's continued efforts to open up its financial markets to foreign investments.
CBA has shown great interest in the Chinese financial market in recent months, investing in Jinan City Commercial Bank and Hangzhou City Commercial Bank previously.