The mainland is on the list of all foreign fund-management companies as a 'must-have office', but they continue to face hurdles in establishing their businesses.
Regulatory constraints and limited distribution channels are restricting their ability to grow their market share and assets under management (AUM).
As if that's not enough, increased competition from domestic companies is adding another layer of challenge for foreign managers.
These and other hurdles are listed in a survey by accounting firm PricewaterhouseCoopers (PwC). The survey, entitled PwC Foreign Fund Management Companies in China, is its third. Robert Grome, PwC asset management leader for Asia-Pacific, says that when the first survey was conducted in 2007 there was optimism about the future of the fund management industry on the mainland.
'In the eyes of some fund managers, that feeling has since evaporated somewhat. The regulatory environment remains tough. The distribution network is still dominated by the four major banks. There're now more Chinese players in the market. It doesn't come as a surprise that foreign fund houses find it challenging to make an impact in China,' Grome says.
He says the top priority of most foreign fund managers is to grow their AUM, that have remained unchanged over the past two years.