HSBC gets long-awaited Chinese JV green light

HSBC has finally received the go-ahead for its investment banking joint venture from China’s securities regulator.

After a period of approaching two years, the UK financial giant is the first foreign bank to be granted approval for majority-owned joint venture (JV) business.

The partnership is with the state-backed Qianhai Financial Holdings and is majority-owned by the HSBC, unlike most other investment banking partnerships in the region as it is usually the case that the Chinese partner retains control.

In a statement announcing the finalising of the deal, HSBC said the new entity HSBC Qianhai, will be able to conduct equity research and brokerage activities on locally listed securities, equity and debt underwriting and sponsoring, as well as advising on domestic and cross-border corporate mergers and acquisitions.

Outside competition

Chinese officials have recently been making a series of moves that is parent of a direct intention to open up the financial services industry. according to local reports, in a recent speech, Zhou Xiaochuan, People’s Bank of China Governor, said earlier this month that protecting domestic firms from outside competition “makes them lazy”.

As reported, on Monday, the Chinese authorities granted rights for foreign investment firms and banks access to the US$7trn Chinese bond marketplace for the first time, as part of its moves to increase trade between China and the rest of the world.

ABOUT THE AUTHOR
Gary Robinson
Deputy Editor, International Investment and Head of Video at Open Door Media Publishing. A fully qualified journalist and filmmaker with more than 20 years' financial services experience, both as journalist and originally as an IFA.

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