MILAN, Dec. 23 (Class Editori) – Chinese financial market lowers its threshold to foreign banks, which will be able to operate with majority controlled subsidiaries.
It is noted that China opened its doors to JP Morgan, one of the most world’s important merchant banks in America.
In recent weeks, it was the turn of the German Allianz and of the Italian bank Intesa Sanpaolo. JpMorgan, beating competition from Wall Street rivals, Goldman Sachs, Citi and Bank of America ML, obtained a license from Beijing to operate on Chinese financial market stocks.
The institute led by Jamie Dimon will open a new unit in Shanghai that will offer brokerage on equities, investment advice, underwriting and sponsor activity on new issues. The division will be based in the iconic Shanghai Tower in the heart of the Chinese city. China "is a fundamental market for many of our local and international customers," said Dimon, "we will continue to invest in China and support our activities in the country".
The license obtained yesterday concludes a journey that began in May 2018 with a request for authorization from the Beijing authorities. Now JpMorgan will be able to take on the majority and therefore control of the joint venture with a Chinese partner that at the moment has not yet been revealed.
Until now, international institutions have been authorized to operate in China only as minority joint-venture shareholders with local entities. However, the Beijing government has long promised to phase out restrictions. A proposal confirmed despite growing trade tensions with the United States.
Last July, the Chinese Central Bank announced that the access limits would be abolished from 2020 and the license granted to JpMorgan seems to go in this direction. Other American banks could follow, including Goldman Sachs, the first in 2004 to land in China as a minority partner in a joint venture, which in August applied to take over a majority.
In October, Citigroup also decided to end its partnership with Orient Securities (of which it held 33%) to form a new one by the end of 2020, this time as the majority shareholder. In short, American banks could soon launch into the conquest of the Chinese financial market, which is worth 40 thousand billion dollars.
Perhaps also because of the commercial war, however, the US giants start with a little delay compared to their Japanese and European competitors. The Sino-British HSBC, for example, was authorized to take control of the joint venture in China already in 2017, while at the end of 2018 it fell to the Swiss UBS, which won 51% of the investment banking unit based on Beijing. Finally, in November, the Japanese Nomura obtained the license for the sale of securities. (All rights reserved)
(Source:Class Editori)
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