UBS Group AG is in talks with China Life Insurance Group to launch an asset management joint venture in China, sources said, as part of the Swiss bank’s plan to bolster its presence in the world’s second-largest economy.

UBS will hold a majority stake in the business unit, which, if finalized, will be China’s first foreign majority-owned asset management joint venture with an insurer since it permitted majority foreign holdings in such partnerships in 2019.

China Life and UBS have signed a memorandum of understanding to set up the joint venture, the formal launch of which will be subject to approval from the China Banking and Insurance Regulatory Commission (CBIRC), said one of the sources.

Both sources declined to be identified on grounds of the confidentiality of the talks.

UBS declined to comment, while a spokesperson for China Life Insurance Co., the listed arm of China Life Insurance Group, did not respond to request for comment.

China has been stepping up efforts to open up its financial sector, worth trillions of dollars to help lure in more foreign investment and shore up the economy.

A string of foreign financial firms have been in talks for, or have set up, majority-owned asset management businesses in the country in the last couple of years, lured by the prospects of increasing wealth despite near-term economic challenges.

BNP Paribas’ asset management arm is in talks to form a wealth management venture with a unit of Agricultural Bank of China, Reuters reported in September, as the French firm pursues a bigger slice of the market.

UBS’ talks to form a new China asset management venture come after its failed attempts this year to seal a similar deal with a wealth management unit of a State-owned Chinese bank, said the two sources. (SD-Agencies)