(China) – US investment banks Morgan Stanley and Goldman Sachs have separately received approval to launch joint venture asset management companies in China to help dispose of more than US$1.5 billion in bad loans.Morgan Stanley will team up with Wall Street rivals Salomon Smith Barney and Lehman Brothers, along with state owned Huarong Asset Management, to form a company called First United Asset Management. This venture has already purchased bad loans worth around US$1.3 billion.
Huarong has also set up a venture with Goldman Sachs, to be called Rongsheng Asset Management, which purchased around US$250 million worth of bad loans in December last year.
China has enthusiastically enlisted the expertise of the foreign investment banks as it moves to clean up a bad loan problem strangling its banking sector.