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China Construction Bank unit secures private equity fund license

A China Construction Bank Corp. unit has secured a private equity fund management license for a newly launched fund with a registered capital of 200 million Chinese yuan, state media reported Oct. 9.

The fund is wholly owned by CCB Financial Asset Investment Co. Ltd., which was set up in July 2017 to facilitate a government-led debt-to-equity swap program, in which major banks are expected to set up private equity funds to acquire relevant debt rights and convert them into equities.

This means China's four biggest state-owned banks by assets have established investment units for the debt-to-equity swap program, with the Industrial & Commercial Bank of China Ltd. and Agricultural Bank of China Ltd. entities acquiring private equity fund licenses in August. Bank of China Ltd. set up a similar unit Sept. 30 though it has not yet obtained such a license, the report said.

As of July 31, Chinese banks have signed swap deals worth 1.733 trillion yuan, and executed 351.60 billion yuan of them, according to the National Development and Reform Commission.

CCB Financial Asset Investment signed 51 such deals worth 640 billion yuan, and executed 110.50 billion yuan of them, the report said.

As of Oct. 9, US$1 was equivalent to 6.92 Chinese yuan.