HSBC entering Chinese bond market
(10 November 2015 – China) Last week, HSBC announced that it is seeking to enter China's $4 trillion (A$5.67 trillion) onshore bond market thanks to an investment banking partnership with Shenzhen Qianhai Financial Holdings, a state-owned investor.
Europe's biggest bank follows other foreign banks including Credit Suisse, Deutsche Bank and Goldman Sachs in establishing joint ventures with local players. However, those banks have made restricted success in China because of the restrictive licenses handed out to early entrants.
CEO Stuart Gulliver said the bank is seeking to find a foothold issuing bonds in China, part of a strategy to expand in China’s export-oriented Pearl River Delta industrial zone, despite its slowing economic growth.
The venture is subject to regulatory approval, HSBC said.
By building its onshore venture from scratch, HSBC is hoping to mitigate problems other foreign investment banks have faced, including the lack of majority ownership and a requirement to partner with weaker local firms.
Gordon French, head of global banking and markets in Asia Pacific for HSBC told Reuters: "The benefit of this approach is we can build this venture to our global standards of governance and technology."
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