Guotai Junan Securities and German financial giant Allianz Group have become the first to win Beijing's approval to set up a joint venture fund management company in China, Guotai Junan said yesterday. The approval marks an important step in fulfilling China's pledge to open up its financial services sector to foreign competition following its entry to the World Trade Organisation last year. Guotai Junan said Guotai Junan Allianz Fund Management Co received approval from the China Securities Regulatory Commission on Tuesday to begin preparations for its launch. 'This is the first joint venture fund management company in China . . . with far-reaching implications for the long-term development of the Chinese capital market,' it said. 'We will strive to introduce the first fund product as soon as possible.' The pair was among the first Sino-foreign tie-ups to apply in July for regulatory approval. Besides Allianz, a raft of other foreign companies are planning fund joint ventures in China including ABN AMRO, BNP Paribas Asset Management, Fortis Bank and UBS Global Asset Management. Shanghai-based Guotai Junan was the top mainland underwriter last year. It is also a 30 per cent shareholder in four-year-old Guotai Asset Management. With about US$1 trillion under management, Allianz ranks among the five biggest asset management firms globally. Allianz has said it will invest about US$4.15 million for 33 per cent of the 100 million yuan (about HK$93.73 million) venture, to be based in Shanghai, the highest stake a foreign investor is allowed to hold under existing Chinese regulations. Allianz Dresdner Asset Management spokesman Guenter Kast has said it plans to increase that to 49 per cent 'as soon as the law allows'. China is to allow 49 per cent foreign ownership in joint venture fund management companies three years after its WTO accession last December. The partnership will give Allianz access to China's huge pool of savings and a fledgling but fast growing stock market, with a market capitalisation of about US$500 billion. China has more than 61 domestic funds, with more than 116 billion yuan - or a small share of its total stock market capitalisation - under management.