JPMORGAN confirmed it had won an auction to hold a majority equity stake in its Chinese asset management joint venture, becoming the first foreign firm to move closer to taking control of an onshore funds business under new rules.

The move comes against the backdrop of a rapid escalation in the U.S.-China trade conflict, with the Trump administration designating China a “currency manipulator” and U.S. President Donald Trump vowing to impose 10 percent tariffs on the remaining US$300 billion in Chinese imports from Sept. 1.

A 2 percent stake in the JPMorgan China fund management joint venture — China International Fund Management (CIFM) — changed hands Friday in an auction on the Shanghai United Assets and Equity Exchange, a deal post on the exchange showed.

The exchange did not identify the buyer in its filing on the day, but sources said JPMorgan Asset Management Co. was the sole bidder.

JPMorgan held 49 percent of the joint venture before the latest deal, which still needs regulatory approval.

“We are looking forward to the next steps to proceed with this acquisition, working closely with our joint venture partners,” Dan Watkins, Asia Pacific CEO of J.P. Morgan Asset Management, said Tuesday.

“Once completed, the deal will be contingent on the approval of regulators in the United States and China.”

(SD-Agencies)