UK charm offensive pays off as China welcomes Ashmore

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Ashmore Group, the U.K. asset manager, has become the first non-Hong Kong business allowed to invest directly in Chinese equities.

As well as being a coup for the FTSE 250 company, which has $78 billion under management, the move will be seen as a victory for the U.K. government's assiduous courting of China over the last few months.

(Read more: Chinese investors eye U.K. bank stake)

U.K. Chancellor George Osborne announced in Beijing last October that the U.K. had been allocated 80 billion renminbi ($13 billion), of the up to 180 billion renminbi allowed for foreign countries to invest in Chinese equities. The new regulation is known as the Renminbi Qualified Foreign Institutional Investors (RQFII) rules. It was previously available only to Hong Kong subsidiaries of mainland Chinese companies.

(Read more: Chinese charm offensive by the U.K.)

Ashmore's share of this pot is understood to be small, but is significant as a symbol of the gradual expansion of the Chinese market. The move will also help boost the U.K. government's aim to make London a hub for renminbi trading, as the Chinese economy continues to expand at a much faster pace than Europe and the U.S.

(Read more: Battle to be renminbi trading center)

Christoph Hofmann, the company's global head of distribution, said in a statement: "Many of our clients are looking for ways to make dedicated investments in China as part of their well-diversified global portfolios. We are very proud that Ashmore has been chosen as the first foreign asset manager to be granted access to one of the most compelling investment opportunities of our time."