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A Manulife Financial office, in Toronto, on Feb. 11, 2020.Cole Burston/The Canadian Press

Canada’s Manulife Financial Corp MFC-T has become the first foreign financial firm to receive regulatory approval in China to take full control of a funds joint venture, paving the way for it to expand its presence in the country’s $3.8-trillion fund market.

Manulife, Canada’s largest life insurer, secured approval to take full control of its joint venture Manulife Teda Fund Management by buying 51 per cent from state-owned Tianjin TEDA International Holding, it said in a statement on Monday.

The 51 per cent stake in the joint venture is worth at least 1.75 billion yuan ($244-million), which was the asking price when Tianjin Teda moved to off-load the share by inviting bids, auction filing shows.

Reuters reported in June the regulator accepted the firm’s application to take full control of the venture, which had around $12-billion in assets under management as of end-June.

“Our approval is a very good sign for the industry as a whole for foreign participants seeking to operate in China’s market,” Michael Dommermuth, head of wealth and asset management, Asia at Manulife Investment Management, said.

The approval came about a month after President Xi Jinping secured a precedent-breaking third leadership term, with some overseas business groups feeling encouraged by a commitment to deepening reform and opening up.

“The fact that soon after the party congress Manulife was approved to acquire Manulife Teda should serve as some type of validation that the public policy they’re trying to articulate in terms of opening up their asset management industry is going to continue,” Dommermuth added.

Foreign financial firms have come in droves to enter China or boost local presence since the country scrapped foreign ownership cap for the fund industry in 2019. Consultancy McKinsey forecasts that China’s funds market will more than double in four years to 2025.

In anticipation of the approval, Manulife IM has since late last year hired at least three senior investment specialists in Hong Kong.

“We’re going to focus on bolstering our fixed income and asset allocation capabilities with Manulife Teda,” Dommermuth said.