Wall Street is in competition with other global industry players to capitalize on one of the biggest financial opportunities in China, as the country fully opens its industry sector.
This follows an initiative by the Chinese government to eradicate foreign ownership limits in April 2020. This move allowed the companies to “run their own money-management units and investment-banking operations”.
Furthermore, there exist a financial treasure of about “$ 54 trillion” with the Chinese financial-services market. Also, in the market’s possession is “$30 trillion in overall fund assets” to be managed within three years”.
Meanwhile, China has put in place measures to introduce “fresh blood” into its financial industry, as it plans to channel household wealth into long-term investments beyond day-to-day stocks and property and to reform its pension system.
This development presents opportunities to foreign companies to “play a key role in helping the country build a more mature market”.
However, China and the USA are struggling with prolonged standoffs on issues such as data security, market access and international stock listing among others.
Also, recent crackdown by China on some of its domestic companies affected international investors, further “puzzling the U.S. business community, which is seeking more clarity of the recent moves from Beijing”.
Furthermore, tensions between China and the U.S. have remained high. Gary Gensler, the Securities and Exchange Commission Chair, has on Tuesday “warned hundreds of Chinese companies that have raised money in the U.S. market that they risk having their shares delisted if they don’t submit to increase scrutiny”.
Additionally, China has issued a strong signal in relation to its commitment to resolve all disputes with the U.S over access to its companies’ books.
Despite these trade tensions, China continues to fully open its financial market doors to Wall Street “heavyweights” such as Blackrock Inc., and Goldman Sachs, to create new “investments and foster more competitive local investment-banking and mutual fund industry”.
China-U.S. Financial Roundtable talk
Following the recent trade tension between China and U.S in 2018, a “contingent of Wall Street veterans and high-level Chinese government officials are preparing for talks again, as business leaders work outside of the Biden administration for greater access to the world’s most populous country”.
Furthermore, previous meetings welcomed representatives with strong ties to “heavyweights” within the U.S. financial industry which includes companies such as JPMorgan Chase & Co, Blackstone Inc., Goldman Sachs, and Morgan Stanley.
The meeting successfully “resolved and try to mitigate political risk that threatened their access to the World’s largest market outside the U.S”, however, attracted an instant rebuke from the then White House top trade adviser, Peter Navarro, who instructed the Wall Street to exit the negotiations.
He further accused the participants of pressuring the then “President Donald Trump to end his trade war with China”.
Notable among the participants is the Chairman of Barrick Gold Corp. and a Goldman Sachs Group Inc., veteran who chairs the meeting, and the former China’s Central Bank Governor, Zhou Xiaochuan, who co-chaired the meeting among others.
Although the advent of the pandemic discouraged physical meetings, the talk was however held virtually in October last year. Also, plans are underway for a similar mode of meeting this year.
READ ALSO: BOG wins court case against Sibton Switch Systems Limited
