Eyeing the twin objectives of deepening its economic cooperation with the U.S. and trying to internalize its currency, Beijing has awarded asset manager BlackRock access to its capital market.
In a significant development, China has allowed BlackRock, an asset manager, to invest in its capital markets.
BlackRock is the first company from the United States to be awarded a Renminbi Qualified Foreign Institutional Investor (RQFII) by China. As a result, today, BlackRock has disclosed that a quota of $1.60 billion (11 billion yuan) has been granted to BlackRock Fund Advisors, a BlackRock subsidiary, by China’s State Administration of Foreign Exchange (SAFE).
“China remains an important investment destination for our clients,” said Ryan Stork, the firm’s Asia-Pacific chairman.
Included in the most recent quota granted by the SAFE, combined RQFII quota to which BlackRock has access to is 35.1 billion yuan, of which BlackRock Asset Management North Asia has 2 billion yuan, BlackRock (Singapore) Limited has 20 billion yuan and BlackRock Advisors (UK) Limited has 2.1 billion yuan.
In June 2016, China had stated it would provide BlackRock a quota, the total of which was set to 250 billion yuan.
For strategic thinking China, the awarding of the quota is in the context of trying to deepen the economic ties between the economies of China and the U.S as well as efforts to internationalise its currency, the yuan.