(Yicai Global) Sept. 19 -- JP Morgan Chase will take an active part in China's financial opening and wants to increase its equity in its securities joint ventures in the country to 100 percent in the next three years, Mark Leung, chief executive of the firm's Greater China branch, said yesterday.

Leung said so at a session themed China's Financial Opening at the three-day Summer Davos 2018 Forum that started yesterday in the eastern city of Tianjin.

JP Morgan formally applied to set up a new trading firm with the China Securities Regulatory Commission on May 14, seeking to hold 51 percent of its equity. The company wants to raise its stake in the firm to 100 percent in the next three years and its JP Morgan Asset Management division also wishes to lift its holding in its JV China International Fund Management to a dominant proportion, Leung said.

The opening measures by China's financial market are unprecedented, Leung observed. JP Morgan has seen its quotes expand fourfold to the permitted limit up for daily transactions on the Shanghai-Hong Kong and Shenzhen-Hong Kong stock connects, added to which the start of the Shanghai-London connect is likely by year's end. The company is in talks with government agencies, companies and investors in the hope of joining in this cooperation.

China will inaugurate futures products targeting overseas investors this year for the first time, in which JP Morgan has already actively participated. The country has gradually lifted curbs on the equity proportion of foreign investments in securities, asset management, futures and other JVs since this year, which is of quite vital importance, he said.

Foreign investment will continue to enter China's capital market, where it is 2 percent of the total, while that ratio is over 10 percent in other developed capital markets (though less than 20 percent). Leung hopes the proportion of funds from abroad in China's capital market finally levels up with its further opening, he said.

Many fluctuations have occurred in China's capital and foreign exchange markets recently, the main cause of which is their overshooting because of external uncertainties, though great pressure is coming to bear to decelerate China's economic growth, Leung noted. JP Morgan must help investors who keep their focus on the domestic market to gain long-term confidence in it, further convey the concept of value investment to them and help perfect the market mechanisms as well, he added.

A decade had passed as of September since the last global financial crisis (2008). Many US -backed financial institutions and regulatory authorities have undergone a series of reforms after this upheaval, especially with capital and its fluidity. 

JP Morgan has gained abundant experience in understanding and coping with regulations in the past ten years and hopes to share this experience with China-funded banks, Leung said.

Editor: Ben Armour