LONDON (Reuters) - British-based fund firm Aberdeen Asset Management has been granted a business licence to operate in China, the British government said on Tuesday during an official visit to the country aimed at fostering trade and investment links.
The licence was issued to a newly-created Aberdeen subsidiary and will enable it to set up an office in China under a pilot free-trade scheme, Britain's business department said.
Aberdeen, which holds top 10 shareholding positions in Asia-focused banks Standard Chartered (LONDON:STAN) and HSBC, has warned investors that China's stock market is prone to overheating and questioned the quality some bond issuance.
Hugh Young, managing director of Aberdeen's Asian business, said the firm welcomed the steady opening up of China's markets but would proceed slowly.
"While the asset management industry there is young and the potential huge, our vow is to avoid short-termism and focus on quality," Young said.
Chinese shares suffered heavy losses over the summer, prompting the authorities into a series of measures to try to reassure investors.
Aberdeen is one of Britain's most active investors in Asia and manages some $120 billion in Asian fixed income, equity and property assets for a range of institutional and retail investors.
In a separate statement, the company, led by veteran investor Martin Gilbert, said it had long wanted to expand its activities in China but faced hurdles of "access, control and manpower".
The company intends to build a small team of business development staff and analysts based at its office in Shanghai to help foreign investors gain access to Chinese opportunities.
The office will also aim to win business from local institutions who want to diversify their portfolios to include overseas assets.