A worker cleans the promenade on the Bund along the Huangpu river in Shanghai. File photo: VCG

Two US financial institutions have been granted access to the massive Chinese capital market, as Beijing continues to open up its financial market to foreign investors and trade tensions between China and the US seem to thaw in wake of the phase one trade agreement.

The moves by the US-based asset managers - Oaktree Capital and Russell Investments - reflected growing foreign interest in China's financial market and the world's second-largest economy, despite pressure from the coronavirus epidemic and the trade war with the US, analysts said. 

However, US officials' recent actions and plans continue to threaten business cooperation between the two countries, even after the phase one deal, the analysts noted.

Oaktree Capital has completed registration for a wholly owned subsidiary in Beijing, becoming the first US private equity fund to set up in Beijing since the outbreak of the novel coronavirus, Beijing's financial regulatory department said in a statement on Tuesday.

Oaktree will reportedly do business in areas such as asset management and investment in China's non-performing loan market.

Just on Friday, another US asset manager - Russell Investments' Shanghai unit - completed registration as a private equity investment fund with the Asset Management Association of China, according to records from the association. 

The two companies' entry into the Chinese asset management market, which is estimated to reach as much as $22 trillion by 2021, came after Chinese and US officials signed a phase one agreement last month, which included language on China's financial opening.

"China's giving them approval also reflected that China is proactively carrying out the terms concerning financial opening in the trade agreement," Xi Junyang, a professor at the Shanghai University of Finance and Economics, told the Global Times on Tuesday.

Prior to the moves on Oaktree and Russell, China's central bank last week approved an application by US-based Mastercard Inc to set up a bank card clearing business in China.

As trade tensions between China and the US thaw after the phase one deal, more US financial institutions could apply for licenses to operate in China, given the massive market, Zhao Qingming, a veteran finance expert, told the Global Times.

The growing interest among US financial firms in the Chinese market also defies some US officials' calls to US businesses to "decouple" from China, according to Zhao Xijun, a vice president of the School of Finance under the Renmin University of China.

"Even as some governments and officials have spoken about risks [about China], investors would still see the opportunities. If they still pursue action against economic rules, they will not be successful," Zhao told the Global Times.

Even after the phase one trade deal, US officials have taken measures - or are reportedly planning to - against China, including barring flights to and from China, removing China from its list of developing countries and perhaps barring US exports of plane components to China - which could all disrupt normal business ties between the two countries.

"If the US hopes for better development for its economy, it should boost cooperation with China rather than randomly issuing policies to guide decoupling from China," Xi said.


Newspaper headline: US firms gain access to China