Nomura Holdings Inc. is planning to establish a fund of over ¥100 billion with Beijing-affiliated China Investment Corp. to help companies from both countries expand businesses, a source close to the matter said Tuesday.
They aim to reach a basic agreement to coincide with Prime Minister Shinzo Abe's meeting with Chinese leaders Friday in Beijing, signaling improved ties between the two countries' private sectors on top of detente in diplomatic relations, the source said.
Nomura will invite other financial institutions to be investors, including the three mega-bank groups of Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. as well as Daiwa Securities Group Inc., the source said.
As Beijing opens up the country's financial market to foreign companies, Nomura is planning to expand its investment operations in China as the securities market at home shrinks due to the declining population.
Other Japanese financial institutions are also stepping up activities in the world's second-largest market.
In January, Mizuho Bank and MUFJ Bank started the issuance of so-called panda bonds, denominated in Chinese yuan and which work similar to Japan's yen-denominated samurai bonds, following approval by the Chinese government.
"China is a massive market that we cannot ignore," said an official of a major securities company in Japan.
Abe will make a three-day trip to Beijing starting Thursday, his first visit to China to primarily discuss bilateral issues, rather than to attend an international meeting, since returning to power in late 2012. The trip will feature a meeting with Chinese President Xi Jinping
Tuesday marked the 40th anniversary of the enforcement of a peace and friendship treaty between the two countries.