HSBC JV fund mgt co in China

HSBC Holdings PLC
22 September 2004


             HSBC SIGNS AGREEMENT TO ESTABLISH JOINT VENTURE 
                    FUND MANAGEMENT COMPANY IN CHINA

HSBC Asset Management, through its subsidiary HSBC Asset Management (Europe)
Limited, has entered into an agreement to form a joint venture fund management
company in China with Shanxi Trust and Investment Corporation Limited
(Jintrust).

Under the agreement, HSBC Asset Management will take up 33 per cent of the
equity in the new company for a consideration of RMB66 million (approximately
US$8 million). The consideration involved in the transaction, representing a
capital injection by HSBC into the new company, will be met by HSBC Group
internal cash resources. Jintrust will take the remaining 67 per cent in the
joint venture company. HSBC, however, will increase its stake in the joint
venture to 49 per cent when regulations permit this level of foreign
shareholding. The transaction is subject to regulatory and other approvals.

The new company will be capitalised at RMB200 million (approximately US$24.4
million), the highest paid-up capital of any fund management company in China so
far.

A national operating licence will be sought for the joint venture company, which
will be headquartered in Shanghai. The operating licence is expected to allow
the company to have the same rights as those of a domestic fund management
company. It is envisaged the joint venture company will manage retail mutual
funds investing in equities and bonds in China's domestic securities markets.

Blair Pickerell, Chief Executive Officer, Asia Pacific at HSBC Asset Management,
said: "HSBC Asset Management is already a leader in the investment management
field in many Asian markets including Hong Kong, Taiwan and India. HSBC also
manages one of the world's largest China funds, the HSBC Chinese Equity Fund,
with US$1.3 billion under management. To develop our presence in China, we are
now tying up with Jintrust, Shanxi Province's largest non-bank financial
institution which is looking to expand into China's growing fund management
industry. Our expertise in fund management, combined with the local knowledge of
our new partner, make us confident that our new joint venture will be able to
offer excellent investment products and services to investors on the Mainland."

Wu Jin An, Chairman of Shanxi Trust and Investment Corporation Limited, added:
"The fund management industry in China has been growing at over 50 per cent each
year over the past three years, and we expect continued double digit growth over
the coming decade. The key to success in this dynamic environment is to build a
strong fund management company which operates to international standards and is
highly professional in managing money, distributing funds and running stringent
operational and risk control systems. HSBC Asset Management has unrivalled
expertise in all these areas and we believe that our joint venture will be able
to play a significant role in the development of the investment management
industry in China in the coming years."

Notes to editors
1. Shanxi Trust and Investment Corporation Limited (Jintrust)
Jintrust was established in 1985 by the Finance Bureau of the Shanxi Provincial
Government. It is the largest non-bank financial institution in Shanxi Province,
with assets of RMB8.36 billion at 31 December 2003. Jintrust manages trust
funds, has underwritten government and corporate bonds and manages state-owned
assets for its parent, the Shanxi Provincial Government, and for a number of
government agencies in Shanxi.

2. HSBC Asset Management
HSBC Asset Management is the global fund management arm of the HSBC Group. With
a network of investment and client relationship teams worldwide, the company has
strong global investment capabilities that are delivered to clients locally. It
offers a comprehensive range of investment management solutions to institutions,
corporations and financial intermediaries and provides bespoke portfolio
management services to high net worth individuals. HSBC Asset Management has
funds under management of US$31 billion in Asia and US$200 billion globally at
31 August 2004.

In Asia, the investment teams of HSBC Asset Management are based in Hong Kong,
Taiwan, India, Singapore, Tokyo and Australia. The company is Hong Kong's
largest retirement fund manager and manages the HSBC Chinese Equity Fund, one of
the world's largest offshore Chinese equity funds with US$1.3 billion under
management. It was also the first company in Hong Kong to launch a China retail
fund which has access to China's A-share market, the HSBC China Momentum Fund.
In Taiwan, the company is one of the four oldest fund management companies and
manages the world's largest offshore Taiwan equity fund, The Taiwan Fund, Inc,
which is listed on the New York Stock Exchange.

3. HSBC in mainland China
Established in Hong Kong and Shanghai in 1865, HSBC has had a continuous
presence in China for 140 years. Reflecting its long-term commitment to the
country, HSBC moved its China head office from Hong Kong to Shanghai in May
2000. HSBC has the largest branch network among foreign banks in mainland China,
comprising nine branches in Beijing, Dalian, Guangzhou, Qingdao, Shanghai,
Shenzhen, Tianjin, Wuhan and Xiamen, three sub-branches in Guangzhou and
Shanghai, and representative offices in Chengdu and Chongqing.



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