Goldman Sachs plans to form a wealth management joint venture with state-owned Industrial and Commercial Bank of China (ICBC), becoming the latest foreign lender to take advantage of a further opening up of the country’s financial sector to target rising affluence in mainland China. Goldman Sachs Asset Management will own 51 per cent of the new wealth management joint venture, with the remaining 49 per cent to be owned by ICBC Wealth Management Company, a ICBC subsidiary formed in 2019. The joint venture will develop a broad range of investment products for the China market over time, including but not limited to, quantitative investment strategies, cross-border products and innovative solutions in alternatives, according to Goldman. “China’s wealth management industry has grown on the back of increased household wealth and continued financial market reform,” said Goldman Sachs Asset Management’s Tuan Lam, whose responsibilities include client management across Asia Pacific excluding Japan. The China Banking and Insurance Regulatory Commission has granted preliminary approval for the establishment of the joint venture. The first products could be introduced by the joint venture as soon as next year depending on final regulatory approval. The announcement comes on the heels of Goldman’s plans to hire more than 400 employees in Hong Kong and mainland China, and the American investment bank reaching an agreement in December with its Chinese partner Beijing Gao Hua Securities to take 100 per cent control of its mainland securities joint venture. The securities joint venture, Goldman Sachs Gao Hua, was started in 2004, but Goldman has operated in the Chinese capital markets since the 1990s. The bank is waiting on final approval from regulators to complete the securities joint venture deal. Asia accounted for 14 per cent of Goldman’s revenue in 2020, or US$6.2 billion, and 3 per cent of its pre-tax profit, or US$419 million. Goldman and other foreign lenders are racing to bulk up their presence in the mainland after Beijing eased rules on foreign ownership in the financial services sector. One key reason: investible assets held by Chinese households are set to surpass US$70 trillion by 2030, with about 60 per cent allocated to securities, mutual funds and wealth management products, according to Goldman Sachs investment research. Banks, in particular, are targeting further integration of Hong Kong, Macau and nine Guangdong province cities in the Greater Bay Area , which boasted a population of more than 72 million people and a gross domestic product of US$1.7 trillion at the end of 2019. HSBC plans to add 5,000 wealth managers over the next five years as part of a US$6 billion investment in Asia, including targeting wealthy clients in Hong Kong, mainland China and Singapore. Standard Chartered plans to triple it income from the bay area and boost its headcount over the next five years, while Citigroup plans to hire up to 1,700 people across its businesses in Hong Kong as it seeks to tap increasing capital flows between the city and mainland China. Citi also is seeking a licence later this year to open a new wholly owned domestic securities business in China. Credit Suisse plans to triple its headcount in China over the next three years, while JPMorgan Chase took a 71 per cent ownership stake in its mainland securities joint venture in November. Morgan Stanley and UBS are other major banks looking to take full ownership of their securities operations in China. Singapore’s biggest bank DBS said in April it planned to buy a 13 per cent stake in Shenzhen Rural Commercial Bank and was opening to increasing its stake in the future.