(Dec 23): US asset manager BlackRock Inc, Singapore state investor Temasek Holdings and China Construction Bank Corp (CCB) have agreed to set up a wealth management joint venture in China, said people with direct knowledge of the matter.

A memorandum of understanding has been announced internally within BlackRock and CCB, according to the people and an internal notice seen by Reuters.

The deal comes as China’s government continues to open up its financial industry to foreign firms. On Friday, French asset manager Amundi SA said it had won approval to establish a majority-owned wealth management venture with a unit of Bank of China Ltd.

BlackRock, the world’s largest asset manager, and Temasek will own the majority of the new venture due to ownership restrictions of wealth management units by Chinese banks, the people said.

CCB, China’s second-largest bank by assets after Industrial and Commercial Bank of China Ltd, set up a wholly owned wealth management unit this year and so cannot control another wealth management firm, the people said.

The state-backed bank has also launched a strategic partnership with BlackRock regarding investment, asset management, risk management and financial technologies, the internal notice showed.

CCB and Temasek did not respond to requests for comment. BlackRock declined to comment.

China has allowed foreign asset managers to set up private fund businesses for over two years, and next plans to scrap ownership rules on mutual fund businesses in April. Wealth management ventures offer another option for money managers to enter the country with controlling stakes.

Other “leading and capable” foreign asset management firms are also in talks with Chinese banks to set up wealth management joint ventures, said Wang Daqing, large bank department chief at the China Banking and Insurance Regulatory Commission (CBIRC).

“Foreign investors have long required greater access to China’s market, so we expanded that access for them first,” a CBIRC regulator overseeing the wealth management industry told Reuters.

“They now have more options when choosing to enter the market, whether it’s a private fund manager or an asset management JV,” the person said.

Market reaction has nevertheless been mixed. For some leading Chinese banks, setting up a wealth management firm controlled by foreign investors has limited benefits.

“The asset under management and investment power of the JV won’t be reflected on the book of our bank,” said the head of wealth management company of a mid-sized Chinese bank. “Plus it’s capital consuming for us to set up another arm.”

Under current regulation, a wealth management company must have no less than 1 billion yuan ($193.4 million) registered capital.

Efforts for such JVs risk descending into a simple political gesture if Chinese banks cannot leverage investment capabilities from the foreign investors, the person said.