American investment manager Principal Financial Group has signed a strategic partnership agreement and MoU with China Construction Bank (CCB) to develop pension and asset management business in China.

The agreement will allow both the companies to set up joint business platforms with product development and market exploration.

In November 2015, CCB got approval from the China State Council to set up a pension company.

Under the deal, Principal will share its expertise in pension investment, operations, product design and other areas to assist the new organization achieve high global standards and professional service.

In 2005, Principal and CCB jointly launched CCB Principal Asset Management Company (CCBPAM), a fund management company in China with $42bn in assets under management as of 31 December 2015.

Principal chairman Larry Zimpleman said: "Signing this new agreement allows us to share our pension expertise in China, but more importantly it gives us an opportunity to help people achieve greater financial security in retirement."

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By GlobalData

CCB principal president and CEO Dan Houston said: "This agreement is an important step in our ongoing relationship with CCB and extending our global pension and asset management reach."