UPDATE 1-Morley and COFCO sign deal on China fund venture

(Adds details on venture)

By Helen Ding and David Lin

SHANGHAI, April 9 (Reuters) - Morley, the fund management arm of Aviva Plc (AV.L: Quote, Profile, Research, Stock Buzz), Britain's biggest insurer, said on Wednesday it has signed an agreement with two Chinese firms, including COFCO, to set up a joint venture fund house in booming China.

An agreement on the deal was inked in Beijing this month with China National Oils, Foodstuffs and Cereals Corp (COFCO) and a trust firm based in the southern Chinese city of Dongguan, the statement said.

No details about the planned joint venture were disclosed.

An official at Dongguan Trust and Investment Co Ltd told Reuters that Morley would have a 40 percent stake in the joint venture, to be based in Shanghai, with the remaining 60 percent evenly split between the Chinese firms.

Morley, which opened a representative office in Shanghai last year, has said it planned to use the joint venture to develop a major business in China, where the asset management sector has grown rapidly along with the booming Chinese economy.

China's 10-year-old mutual fund industry had about 3.2 trillion yuan ($457 billion) in assets under management at the end of 2007, following explosive growth over the past two years as investors piled into the sector while the stock market boomed.

There were 59 mutual fund management companies and 368 mutual fund products in mainland China at the end of last year, according to China's Essence Securities.