(Bloomberg) — Vanguard Group Inc., the US asset management giant, has decided to shutter its remaining business in China after a retreat two years ago, according to people familiar with the matter, abandoning a 27 trillion yuan ($3.9 trillion) fund. market that global competitors are embracing.

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The Malvern, Pennsylvania-based firm has notified the Chinese government of intentions to shutter its unit in Shanghai, the people said, requesting not to be named because the matter is private. The company also is planning to exit a robo-advisory joint venture with Jack Ma-backed Ant Group Co., they added.

The moves will mark a complete exit from China for the $7.1 trillion giant, which once saw significant potential in the world’s second-largest economy. The reversal stands as a cautionary tale for global peers including BlackRock Inc. and Fidelity International Ltd., that are still racing to build up local operations as the nation’s recovery and a new pension reform brighten prospects.

Vanguard said its Shanghai unit and the joint venture are operating normally. Ant and the JV representatives said the same. All three declined to comment further.

The China Securities Regulatory Commission didn’t immediately reply to a request seeking comment. Caixin reported Vanguard’s plans earlier.

A complete retreat would follow Vanguard’s surprise move two years ago to scrap plans for a mutual-fund management license in China.

Fidelity and Neuberger Berman Group have recently joined BlackRock in launching onshore funds through new wholly-owned units, while Manulife Financial Corp., JPMorgan Chase & Co. and Morgan Stanley have gained approvals to buy out local partners to gain full control of existing ventures.

The race for fund advisory is heating up with more players coming in, hurting profitability. Vanguard’s venture, which has been offering only products from competitors, booked a loss in 2021 that was much higher than an internal forecast made after it was set up in 2019, Bloomberg reported last year. Vanguard owns 49% of it.

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