To facilitate the sale of bonds through blockchain, China Construction Bank has partnered with Hong Kong-based fintech firm Fusang. In a joint company statement, both parties said that the digital bonds, which will be listed on Malaysia-based bourse- Fusang Exchange, can be bought for bitcoin or US dollars.

Fusang chief executive Henry Chong said that the fintech also intends to work with the other top Chinese bank on the issuance of certificates in other currencies.

According to a report by blockchain and crypto data platform LongHash, more than 10,000 blockchain-based companies have been established in China during the first seven months of this year.

LongHash said that by the end of the year, the total number of blockchain companies in China could pass 2018’s total of 185,00. The Guangdong Province in Southeast China has the highest number of blockchain startups with Yunnan Province in the southwest coming in second.

Earlier this year, the Chinese government also approved numerous blockchain-related projects, most of which were from Beijing. The approved projects include big names such as Baidu, JD, Alibaba, Suning, China Mobile and China Merchants Bank among others. It is interesting to see an emerging trend in the establishment of several blockchain companies in China despite the coronavirus pandemic

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The announcement was made on the website of the China Banking and Insurance Regulatory Commission (CBIRC) last week.

The deal comes at a time as the Chinese government is looking to open its financial market to foreign companies and investors. Last year, China amended some of its rules and regulations which now allow foreign investors to enter the market.

The announcement of the wealth management joint venture also comes at a time as China looks to get back on its feet after a pandemic which bought economic activities in the country to a stall. China hopes the entry of foreign entities in its financial market will help boost its economy.

Previously, foreign investors such as France-based Amundi, which is Europe’s largest asset manager, and Bank of China Wealth Management have received approval from Chinese regulators to set up a joint ventures in the country.

Also, similar approvals have been received from Chinese authorities by European lenders such as UBS and US-based investment giant JP Morgan Chase.

Another announcement that was made on CBIRC website was the approval for American insurer Chubb to increase its stake in Huatai Insurance to 46.2 percent.

HSBC recently revealed that it is also planning to increase its presence in the wealth management space in China. To bank said that it will hire 2,000 to 3,000 wealth planners within four years in China. The first 100 new people have already started in Guangzhou and Shanghai, according to HSBC.

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China Construction Bank  is one of the big four banks in the People’s Republic of China. Under the terms of the agreement, BlackRock and Temasek will create and distribute development products for the Chinese market. 

The deal is subject to regulatory approval. The US firms including BlackRock are facing challenges despite China’s financial openness. Currently, there are other foreign firms seeking to establish joint ventures and explore China’s market. 

The regulatory changes in China allows foreign firms to have 51 percent of a wealth management joint venture with a bank. Companies including UBS, JPMorgan and Nomura have received regulatory approval for acquiring majority control of their local securities joint ventures, Bloomberg reported. 

BlackRock Chief Executive  Larry Fink said the company seeks to be one of China’s top asset  managers. The company perceives China to be one of its greatest platforms for growth. 

In 2018 end, nearly seven percent of BlackRock’s assets under management came from the Asia-Pacific region. Its efforts to expand into China has led to early talks with Chinese multinational Tenancent to further tap into the investment market with a diverse portfolio. 

Temasek is the world’s largest asset manager and Singapore’s state investor. Earlier this month, Temasek startup fund raised $70 million from Japan’s Marubeni and Sumitomo Mitsui Banking Corporation (SMBC) to invest in AI ventures in India and China. 

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