Aberdeen granted China business licence

Aberdeen Asset Management has been given a business licence to operate in China, which it will use to boost its research presence and build its Chinese investors.

The Wholly Foreign-Owned Enterprise (WFOE) business licence allows Aberdeen to set up a subsidiary in the free trade zone, which it will use to raise assets from investors in the country.

Aberdeen will also use the newly-founded office to boost its local equities research, which it currently runs in-house from Hong Kong.

However, the manager says it is not looking for quick gains from the new business.

Hugh Young, managing director of Aberdeen’s Asian business, says: “While we welcome China’s steady market opening and we’re thrilled to gain our WFOE licence, we will proceed slowly.

”It’s important to maintain our investment disciplines and assess opportunities carefully. While the asset management industry there is young and the potential huge, our vow is to avoid short termism and focus on quality.”

Martin Gilbert, chief executive of Aberdeen Asset Management, says the new business license will enable UK investors to access China markets more easily, as well as allow Chinese investors better access to international markets.

“UK business cannot ignore the structural development of China,” says Gilbert. ”It is already the second largest economy in the world and will sooner or later surpass the US.”

“The work undertaken to obtain a WFOE licence is part of our overall strategy to ensure Aberdeen Asset Management is well placed over the next 10 to 20 years,” he says.

The announcement comes as Chancellor George Osborne is currently on a trade trip to China, aiming to increase collaboration between the two countries. 

As part of this, Osborne announced China and the UK will begin a feasibility study into integrating the two country’s stock exchanges.