BlackRock, the world’s largest money manager with $9 trillion in assets under management as of end-March, has made expansion in China a priority. It secured a nod from the China Securities Regulatory Commission last August to establish the mutual-fund business, which is now permitted to begin selling funds.

“We look forward to sharing our global investment expertise and offering more differentiated investment solutions to Chinese investors,” BlackRock Chairman and Chief Executive

Larry Fink

said in a statement Friday.

The U.S. giant is among the first foreign firms to reach this milestone. Other global investment houses that are also setting up wholly owned mutual-fund units in China include Fidelity International and the asset-management arm of JPMorgan.

BlackRock’s Shanghai-based unit, BlackRock Fund Management Co., now has six months to launch its maiden fund for individual investors, a spokeswoman said. This and future funds are likely to be sold through traditional mutual-fund distribution channels in China, which include banks and brokerages, she added.

Rachel Lord, BlackRock’s chair and head of Asia Pacific, told an investor day on Thursday that the broader asset-management business would benefit from China opening up to foreign players. “It’s quite clear that the opportunity onshore in China to participate in this opening up is very, very large for the entire industry,” she said, according to a transcript. “And we do expect to take a market-leading position over the course of the next decade.”

Last month, BlackRock was permitted by China’s banking regulator to pursue an onshore joint venture in wealth management together with a unit of state-owned China Construction Bank and Singapore state investment company Temasek. Wealth-management businesses in China also typically sell investment products to individuals.

In another recent approval, Chinese regulators in May gave their consent to a wealth-management joint venture between Goldman Sachs and

Industrial & Commercial Bank of China Ltd.

—Dawn Lim contributed to this article.

Write to Quentin Webb at quentin.webb@wsj.com