UBS Group AG’s David Chin wants to double the size of his China investment-bank team. Morgan Stanley’s Wei Sun Christianson plans to build a brokerage business from scratch. And Todd Leland at Goldman Sachs Group Inc sees “infinite growth” in asset management.
For the executives leading Wall Street’s charge into China, the race is officially on to tap one of the biggest opportunities in global finance. Though largely overshadowed by the Covid-19 crisis, China scrapped foreign ownership limits on April 1, allowing firms to run their own money management units and investment banks for the first time.
The numbers are staggering: China boasts a $45tn financial services market, with as much as $30tn in overall fund assets to be managed within three years, according to Oliver Wyman estimates. The investment-banking revenue pool is poised to triple to $18bn a year by 2026, based on Goldman Sachs estimates.
The enormous potential comes with a full slate of challenges for the Morgan Stanleys of the world. For years, the banks have tried to crack the few parts of the Chinese market open to them or gain influence via minority stakes in local firms, making only modest headway. A litany of regulations and entrenched Chinese banks have largely thwarted them, while a clash of strategies at their joint ventures stifled growth. Tougher competition looms, with China considering a merger of its two largest brokerages to fend off the global giants, people familiar with the matter said.
With so much at stake, the global banks remain undaunted and are poised to step up investments. Here’s a sampling of some of the key players in investment banking and money management leading the next push in China, and their strategies to win a bigger slice of the prized market.
Morgan Stanley is regrouping in China. After it failed to win management control of its first joint venture formed in 1995, the bank shifted to a smaller firm in 2010 to rebuild from within. The firm overhauled the management of Morgan Stanley Huaxin Securities Co, installing US bank staff in the majority of key roles. It’s now ready to exploit the latest market opening, said Christianson.
“Over the past few years we have carefully invested in bringing in the right people and building up our processes,” said Christianson, 63, who joined Morgan Stanley in 1998 and now leads the China business from her native Beijing. “As we transition to a majority controlled operation, we want to be certain that we can deliver Morgan Stanley standards to the local market place.”
Morgan Stanley won approval last month to take 51% of its securities joint venture, and wants to eventually own 100%. As a first step, the bank will apply for additional licenses to broaden its products and invest in new businesses, Christianson said. 
Over time, the firm plans to build out an onshore brokerage and market-making capability as China’s securities industry is expected to become more institutionalised. The bank will also expand its asset management partnership and ultimately take control.
The securities firm is betting on increased business from private placements and corporate restructurings, while it expects a focus on the technology sector will win equity mandates on the Nasdaq-style tech board that launched last year in Shanghai.
For James Paradise, co-president of Goldman Sachs in Asia Pacific ex-Japan, China’s slowing economy and its push to lower debt makes it easier for foreign banks to expand. 
The government wants them to pick up the slack from what it considers “overburdened” Chinese lenders.
Beijing is saying: “We’re slowing, we need financial markets to provide a conduit for capital to come onshore,” Paradise said in an interview. “China is shifting from a bank-financed model to a market-financed model. This is for real this time.”
For Goldman, that means time to ramp up. The New York-based bank last month won approval to increase its joint venture stake to 51% and will eventually get to 100%, giving it a footprint in China that resembles operations elsewhere.
Though the talent search won’t be easy – given the need to balance local and international staffing – Goldman plans to double its head count to 600. Leland sees particular growth in asset management, where Goldman is just getting started.
“Bringing that global insight into China is imperative,” Leland said.
First mover advantage is key for Chin, who was named China country head for UBS in December, adding to his role as head of the investment bank for Asia Pacific.
UBS can point to a series of firsts that Chin says give it an edge over global rivals. It was the first foreign institution to invest in domestic Chinese stocks in 2003 and was the first to get majority control of its securities partnership since China announced new rules in 2017.
Greater China now contributes more than half of the bank’s Asia Pacific revenue, though profits have been elusive in the mainland. Still, the bank plans to double its investment-bank head count in China to 400, on top of the 1,200 staff already there in other roles. 
UBS looks to expand its brokerage and advisory businesses, betting the wider inclusion of Chinese domestic stocks and bonds into global indexes will boost profit.
“Developing a business in China takes patience and trust over a long period of time,” said Chin, 51, a Cambridge University grad who’s been in Hong Kong since 1996 for UBS and its predecessor firms. “We have come a long way on the journey, but there is still far to go.”
China may be one of the most attractive asset management markets in the world, but Eddy Wong, head of JPMorgan Chase & Co’s fund unit, says he doesn’t have to tackle it alone. The New York bank, which has had a joint venture in China for 16 years, plans to bolster its distribution channels with partners such as Jack Ma’s Ant Financial Services Group and Tencent Holdings.
JPMorgan’s joint venture already has more than 300mn clients across different platforms, and has tripled assets under management to $21bn. 
The bank increased the ante on China this month, agreeing to buy out its partner to take 100% of the firm. Wong, who joined JPMorgan a decade ago, became CEO of the venture in May.
“We’re very excited to see the regulation updates and the market continuing to open up,” Wong, 43, said in a phone interview from his base in Shanghai. “JPMorgan has a very long-term view and is completely committed to China.”
The money manager is planning to create more passive products such as index and exchange-traded funds to allow foreign clients make long-term investments. It’s also betting on the pension business, prompted by China’s aging population. 
The first retirement fund was launched in September, with two more in the first half of 2020, Wong said.
Cross-border investment is a key growth area for asset management in Greater China, and HSBC Holdings Plc plans to be at the center of it. 
The London-based bank, which already gets the majority of its overall earnings from Asia via a Hong Kong hub, wants to be a conduit for international clients looking to increase exposure in China, while helping local investors and companies diversify abroad.