Citi is the first U.S. bank to receive such a licence, which will allow it to hold securities for safekeeping on behalf of mutual funds and private funds domiciled in China, once it has passed an onsite inspection.

Despite Sino-U.S. political tensions, several U.S. asset managers are expanding their presence in China, after foreign ownership restrictions were scrapped earlier this year.

BlackRock (BLK.N) last week became the first global asset manager to win regulatory approval to set up a mutual fund unit in China, and Vanguard Group announced it would shift its Asian headquarters to Shanghai and close its Hong Kong and Japan operations.

“As international fund managers, securities firms, and insurance companies set up in China, we believe they will want a trusted service provider to help them mitigate risks and reduce costs,” David Russell, Citi’s APAC Head of Securities Services, said in a statement.