Morley Fund Management, the asset management division of UK's largest insurer Aviva PLc, said Wednesday that it has signed a China joint venture agreement with China National Oils & Foodstuffs & Cereals Corp.(COFCO) Ltd and Dongguan Trust & Investment Co Ltd.

Walter Lin, Morley's chief representative in Shanghai, told XFN-Asia that the reparatory work on the fund joint venture, with initial registered capital of 200 million yuan, is expected to be completed early next year.

An official at Dongguan Trust and Investment Co Ltd said Morley will hold a 40 percent stake in the joint venture, while COFCO and Dongguan Trust & Investment will hold 30 percent each.

This joint venture is the next step in the development of our long-held ambitions in China, driven by both support for our parent company, Aviva, and the opportunities for our own profitable growth, Said Alain Dromer, Global Chief Executive of Aviva Investors.

Dromer added that Morley is currently applying for a Qualified Foreign Institutional Investor (QFII) license to allow it to purchase stocks and bonds traded in the mainland.

The QDII program allows funds to raise cash in yuan or foreign currencies and invest abroad in a broad range of assets. China sees the program as an important way to let capital flow out of its borders to offset continued upward pressure on the yuan.

Aviva, Morley's parent, has had a life insurance joint venture with Cofco since 2003. At present its insurance premium income in the fourth place among the 25 ioint venture insurance companies in China.