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Brokerage joint venture partners take to the floor

China's securities markets seem to be on the verge of opening up to foreign houses working in joint ventures with local partners. The foreigners are divided on whether they should go for market share by taking on big partners or seek out smaller firms that bring the licences they need but are likely to have fewer skeletons in the cupboard.

Tien Dan, president of Changjiang Securities,
and BNP Paribas Peregrine's Dry shake on it

Behind the scenes of China's quickly developing financial system a lot of frantic negotiations are taking place about the entry of foreign investment banks into the domestic market. Joint ventures are the likely vehicle. Though few involved are comfortable admitting it, international banks and Chinese securities houses are eyeing each other up, wondering who to hold hands with.

"It's like a terrible school disco," says one banker. "Everyone is waiting to see who will pair off with whom when 'Stairway to Heaven' starts to play."

Under China's regulations, foreign players are unable to underwrite or act as brokers in the lucrative domestic A-share equity market. But new laws, drafted by the China Securities Regulatory Commission in December, may be about to change that. The legislation will allow foreign investors to take 33.3%

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