Few people illustrate the rise of China in global investment banking better than Wei Sun Christianson. Born in Beijing during the Cultural Revolution, she elevated herself through education. She became the first mainland Chinese student ever to graduate from Amherst College, went to Columbia Law School and took Hong Kong by storm after moving there in 1992. Today she is Morgan Stanley’s China chief executive and Asia Pacific co-chief executive.
As a mainland woman in a male-dominated profession, everyone in banking knows her, but not everyone knows she was involved in setting up the regulatory structure for Chinese companies to be listed in Hong Kong while working at the Securities and Futures Commission, reporting to Laura Cha. These rules would pave the way for the deals that later made her career; as a mainlander with securities law training and a US passport, she was the right person in the right place at the right time.
“It was a great experience,” she says now. “It was a very dynamic market, yet at the same time was not yet well-incorporated into the rest of the world.” While there she saw what she still considers one of the most important ever deals in Hong Kong: the 1993 dual listing of Shanghai Petrochemical in Hong Kong and New York, the first of its kind.
“That was the most challenging deal,” she says. It was the first time Hong Kong authorities had had to understand the mechanisms of US listings, such as the New York Stock Exchange’s stabilization mechanism; the rule changes that came with it enabled simultaneous listings in Hong Kong and New York.
As a banker, joining Morgan Stanley in 1998, Christianson would spend a lot of her time on deals that mirrored the pioneers she had seen at the SFC, most obviously Sinopec’s landmark three-way listing in Hong Kong, New York and London in October 2000, raising $3.73 billion.
“Looking back, that was an inflexion point for Hong Kong to start to open up,” says Christianson.
She recalls that opinion in China was not wholeheartedly behind listings like these.
“There was a lot of debate, people saying: ‘Selling assets to foreigners is bad for China and national security,’” she says. “Like when we did the CCB [China Construction Bank] transaction. Can you imagine? People said: ‘The pillars of the economy, how can you allow Bank of America to become a 5% shareholder, to sit in this boardroom?’
“The voice of concern was so loud, but I have to say, credit to Deng Xiaoping, Zhu Rongji and other Chinese leaders who pressed right on. And Hong Kong played a critical role by having the right soft infrastructure, regulatory framework and effective execution.”
She is well placed to assess the impact that CICC, established in 1995 with Morgan Stanley as a 35% shareholder and later the first mainland securities firm to conduct securities underwriting in Hong Kong, has had on both Morgan Stanley and the development of the markets. “I think it’s huge. It’s really huge.”
MS took it seriously from the outset, seconding people to CICC to build best industry practice and training a few dozen individuals a year in the Morgan Stanley headquarters for three months from 1995 until the exit in 2010.
It will be a challenge to come up against CICC through Morgan Stanley’s own far smaller joint venture, which is going through the approval process for majority ownership now.
“We take huge pride in the fact that CICC is very competitive and successful,” she says. “We are a Wall Street firm with a global business and China is one location where we intend to build a fantastic business, but let’s be real: we are not going to compete or become number one in China. We will be a niche player.
“This is a reality we have to accept, but it’s OK, because the pie is huge. Even if we take a limited market share, in absolute dollar terms it is a very attractive business for us. With our global standards and top-quality talent pool, although we might be supporting actors or actresses, we still want to win the Oscar.”
Christianson thinks that initial objections to opening up the domestic arena – that the markets would be swamped by foreign players – no longer apply.
“They were worried that we would come in and eat the sheep,” she says. “Now the sheep have become gigantic bulls. They shouldn’t be worried anymore.”
Christianson says the pace of market development during her career has surprised her.
“There is a leapfrogging,” she says. “China goes straight to paperless trading from day one. The success of Chinese fintechs is another example: mobile payment has leapfrogged the whole idea of using chequebooks and credit cards.
“I consider myself extremely lucky to be part of the process and to be witnessing the transformation.”