Great Wall Street of China

Playing with pieces of China
Two sneak through

MENTION CHINA BUSINESS to most investment banks and they start by trotting off the name of the last state-owned enterprise they listed or their latest mainland principal investment. Press a little harder and ask about their domestic business strategy and the spin begins to falter. The overwhelming proportion of the China business of global investment banks, of necessity, still takes place in offshore markets or, at best, is transacted in China by suitcase bankers who have flown in, usually from Hong Kong.

That is beginning to change. China’s domestic markets are opening up to foreign banks at a pace that has taken many by surprise. And although the market is opening only slowly, most bankers will admit that, five years from now, they will simply have to be established onshore in China if they are to remain competitive. The trend is clear: China’s investment...