JPMorgan's firing of senior portfolio manager Tang Jiang amid allegations of illegal trading practices has prompted foreign fund managers to reassess investment strategies in China, according to a story in the Financial Times. Government policy requires foreign groups to operate by acquiring a minority stake of up to 49% in a local joint venture, and according to McKinsey, 26 of 58 domestic mutual fund managers have minority foreign shareholders, whereas Sino-US ventures make up 40% of total assets under management. However, analysts expect to see their market share drop in the next two years, reflecting competitive pressure from domestic rivals and rising tensions within joint ventures. Nonetheless, the market is still lucrative: Chinese-managed assets, including pension funds, will jump to US$1.4 trillion by 2016, with leading fund industry profits of US$3 billion a year within a decade.
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