Legal & General scales back China plans - report

According to Reuters, L&G had been planning to apply for a QDLP (qualified domestic limited partner) license in the country.

A QDLP license allows foreign firms to sell offshore products to Chinese investors.

But L&G has now shelved the plans, Reuters reported, citing unnamed sources with direct knowledge of the matter. It has also cut the size of its local team to two people from ten, because of the decision.

The two staff members will now focus instead on the firm’s existing business of managing offshore assets for Chinese institutional investors.

L&G did not comment on the QDLP licence, but told Reuters that China remained "an important and large market opportunity for asset management over the long term".

"This is why we are choosing to maintain a presence through our representative office and to retain a small team."

It added that it continued to "actively" seek ways to grow existing Chinese clients investing in international markets.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said reducing the size of the Chinese team was a "clear sign that the group’s original growth plans for the region have come off the boil amid growing uncertainty.

"This is by no means something that moves the dial too wildly for the group, but it does add another asset-management voice to the bearish side of the Chinese economy.

"That said, L&G isn’t walking away from the region and will be maintaining a presence. It seems it’s not that the group thinks the opportunity is over, but rather the timing isn’t quite right."

As at 1145 GMT, shares in the FTSE 100 group were trading 1% higher at 256.4p.