What does the UBS and Guotai MOU mean?

This type of memorandum of understanding at once says a lot, and says nothing.

UBS Asset Management and Shanghai-based Guotai Asset Management jointly announced over the weekend that they had signed a memorandum of understanding providing a basis for UBS to explore a possible acquisition of an equity interest in Guotai.

It is not the first such MOU but it comes at a time when scepticism about foreigners successfully establishing a joint venture with a Chinese fund management company FMC is on the rise. This agreement is important because it affirms that this strategy is far from dead.

On the other hand, while an MOU also highlights the commitment of Guotai's management led by CEO Li Chun-ping to forge a joint venture, it doesn't really shed light on the...

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