Why Wall Street is doubling down on China amidst ongoing trade war
Wall Street is doubling down on China’s USD 47 tn financial market despite ongoing rhetoric to cut ties with Beijing: While the US and China are butting heads over technology and trade, Wall Street kingpins JPMorgan and Goldman Sachs are going long on Beijing, buying up office space and expanding their headcounts. Tempted by the largest untapped pool of capital in the world, the US financial institutions have become increasingly bullish on China since the signing of the phase one trade accord in January, which allowed foreign firms to manage funds for any investor and hold a majority stake in Chinese companies, explains WSJ Finance Jin Yang (watch, runtime: 05:16).
It’s not all smooth sailing: US firms have to compete with well-established Chinese firms, the top eight of whom have a 40% share in the domestic securities market. US firms also have to comply with restrictions such as a new cybersecurity law which requires foreign firms to keep clients data inside China, leaving them susceptible to Chinese government security checks as well as forcing them to balance a different set of data protection and ethics for clients at home versus in China. Then there’s the risk of following HSBC into the political crosshairs.