China scraps foreign ownership limits in financial industry joint ventures, as Beijing moves to further open up the market to foreign investors. Main cities in China, such as Shanghai, Beijing become high potential financial services hub for banks.
JPMorgan, Goldman Sachs, Morgan Stanley, Credit Suisse and Nomura have won regulatory approval to take majority ownership of their mainland securities joint ventures.first bank to announce it would apply for full ownership of its securities unit.assume 100% control of its UBS Securities China JV, expanding its 51% majority stake. Other banks are expected to ask for full control.
“As banks are now in the process of taking majority ownership over their mainland JVs, this means they’re also looking to hire more talent,” says Chris Wong, head of Selby Jennings in China.
"Foreign banks will recruit front-office talent from within China and (to a lesser extent) from Hong Kong. This might potentially mean a small brain drain from Hong Kong as there’s just not enough talent to satisfy the requirements of foreign banks in China. But the group more willing to move are those originally from mainland China, who are now looking to relocate back, whether for professional or family reasons,” says Wong.
"Moreover, Hong Kong bankers are themselves typically reluctant to move to Shanghai, with higher income tax the main impediment. Many bankers would still prefer to remain in Hong Kong than relocate to China at this moment. Given the lifestyle and low tax on offer, Hong Kong still hasn’t lost its attraction as a city,” he adds.
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