State Street Corp, the largest United States pension services manager, is to team up with Bank of China Group to offer retirement plan services in the mainland. The pioneering alliance will allow the pension giant to offer administrative and custodian services to the mainland bank, which will be responsible for sales and subsequent investment management of plan assets. 'We have experience in the pension business in the US, UK and Europe and we can bring that experience and knowledge to the pension business in China,' said Ronald Logue, the chairman and chief executive of State Street. The mainland pension market remains closed to foreign firms, but Mr Logue said the alliance was the basis for a future joint venture should the rules change to allow direct participation. The US company's investment arm, State Street Global Advisors, has formed two other alliances, including one with E-fund Management to offer services to mainland institutional investors. A similar arrangement with China Asset has involved State Street in the mainland's first exchange-traded fund - China 50 ETF - which started trading in Shanghai last month. The index fund traces the performance of stocks in the Shanghai 50 A-share index, and has seen an average daily turnover of US$30.8 million. China Asset sold the fund while State Street provided administration and product design. 'The US pension market is mature. Asian and European markets are set to grow much faster than the US. Only if we expand our business outside the US can we capture faster growth for our shareholders,' Mr Logue said. 'The alliances are a good training ground for State Street to learn more about our partners and about Chinese financial markets. This is better than forming joint ventures since we don't yet know each other well.' In Hong Kong, the company has already provided administrative services for Mandatory Provident Fund providers. Besides investing in the mainland, Mr Logue said State Street intended to use it as a base for conducting technology development for the group. It teamed up with Zhejiang University to establish the State Street Zhejiang University Technology Centre in 2001 to develop software.