China is taking significant strides towards establishing itself as a global financial powerhouse. Recently, two of the country's largest state-backed brokerages, Guotai Junan Securities and Haitong Securities, announced a merger that will create a financial giant with assets totaling $230 billion, surpassing the current leader, CITIC Securities.
This merger is a key part of China's broader strategy to consolidate its $1.7 trillion financial sector. The aim is to build stronger, globally competitive investment banks capable of rivaling Wall Street's giants. Supported by the nation's securities watchdog, China targets the creation of two or three international investment banks by 2035.
Historically, Chinese financial institutions focused primarily on domestic markets. However, this merger marks a strategic shift towards competing in the highly competitive global financial arena. By pooling resources and expertise, the newly formed entity is poised to challenge Western-dominated financial systems, signaling China's intent to expand its influence on the world stage.
The timing of this move aligns with the increasing presence of Wall Street firms in China, which have been capitalizing on the gradual opening of the country's financial markets. In response, China is fostering homegrown financial institutions capable of matching the sophistication and scale of their Western counterparts, aiming to reduce dependence on foreign financial systems and diversify economic growth.
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Why mega merger means capital gain for China's financial goal
cgtn.com
