The skyline of Lujiazui in Shanghai Photo: CFP

US-based AllianceBernstein (AB), an international fund management company, announced on Tuesday that its wholly foreign-owned enterprise has been given approval by the China Securities Regulatory Commission to conduct securities and futures business in China. This makes AB the latest global asset manager to establish mutual fund business in the country.

Experts noted that it is also a fresh signal indicating that foreign investors are actively starting businesses in the Chinese capital market, as the world's second-largest economy showcased strong resilience in its economic rebound with an improving business environment.

AB China will now offer onshore investment products and solutions to retail and institutional investors in China, helping them explore investment opportunities in their home market, the company said in a note it sent to the Global Times on Tuesday.

The company became one of the first overseas investment managers of the National Social Security Fund in 2006 and was granted Qualified Foreign Institutional Investor (QFII) status in 2008.

China in 2020 removed foreign ownership caps in its mutual fund industry. BlackRock, Fidelity International and Neuberger Berman Group have secured approval to run wholly owned mutual fund businesses in China. 

Morgan Stanley and JPMorgan Chase & Co won full control of their mutual fund joint ventures last year.

 "China's continuous efforts to improve its business environment and facilitate processes have stabilized the confidence of foreign investors," Wang Peng, an associate researcher from the Beijing Academy of Social Sciences, told the Global Times on Tuesday. "More importantly, the country's institutional advantages, complete supply and industry chains, as well as its vast market are the basis for attracting foreign investment."

In 2023, foreign institutional investors continued to actively seek QFII licenses. According to stcn.com, the number of approved institutions reached 81 in 2023, second only to 118 in 2021, which itself was the second-highest level since 2003.

The trend reflects that the willingness of foreign investors to enter and expand in China is rising steadily. At present, China's capital market is undervalued, and relevant stock assets have medium- to long-term attractiveness, so more foreign investors are willing to apply for QFII status to grasp opportunities in the country, Fu Yifu, senior researcher at the Suning Financial Research Institute, said in a report cited by stcn.com.

 "The continuous opening-up of China's capital markets also provides opportunities for global investors… We have confidence in China's long-term economic prospects, which will continuously create new growth opportunities for international businesses and investors, in particular in the country's new-economy sector, low-carbon transition, its trade corridors with the Middle East and ASEAN, as well as its financial markets," Wang Yunfeng, CEO of HSBC Bank China Co, told the Global Times earlier.

Almost one-third of the 417 respondents to Bloomberg's latest Markets Live Pulse survey said that they would increase their China investments over the next 12 months. That compares with just 19 percent in a similar August survey and is higher than the 25 percent who were in that category in March.

A separate survey conducted by Bank of America Corp showed China was the most underweighted Asian market. That means there's more room to increase rather than cut allocations, according to a Bloomberg report on Tuesday.