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THE CHINESE AGENDA Taiwanese experts dissect Beijing’s ‘dominant’ demeanor
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Saturday, December 28, 2019 Vol. 15 No. 79
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By Rene Acosta
HE manner by which China has been exerting its influence, including Beijing’s apparent attempt to impose itself abroad as of late, goes beyond the globally accepted norm that truly deserves international concern, an independent Taiwanese think tank has observed.
But while the Chinese Council of Advanced Policy Studies (CAPS) has concurred in not only the observation, but even the complaints by countries about Beijing’s conduct, it also offered the best possible explanation behind mainland China’s demeanor.
Intimidation, infiltration
ACCORDING to CAPS secretary general Andrew Yang, the Chinese government has been dealing with the issue of its territorial claims in the South China Sea (SCS) mostly by way of intimi-
dation, an observation that had been consistently raised by Asean member-states, particularly by other claimant states. Even outside of the region, a host of countries have been very vocal about China’s conduct in the SCS in pursuit of its claims. The United States, in particular, has criticized the activities, claiming they were not in accordance with the existing rules-based order. The US, which regularly conducts freedom of navigation and overflights in the regional waters, Continued on a2
ANDREW YANG, secretary-general of Taiwan’s private think tank Chinese Council of Advanced Policy Studies
Goldman Sachs beware: China plans ‘aircraft carrier-sized’ banking rival
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By Bloomberg News
HINA last week commissioned its first home-built aircraft carrier to project its military might. It’s now on a mission to create “aircraft carrier-sized” investment banks to take on Wall Street’s giants. As the nation prepares to fully open its $45-trillion financial industry to foreign competition next year, policy makers and regulators are pushing to beef up its own players to go toe-to-toe with the likes of Goldman Sachs Group Inc. Unlike its massive commercial banks such as Industrial & Commercial Bank of China Ltd. (ICBC) which dominate at home and carry heft globally, China’s brokers are minnows in an international perspective. Beijing’s latest ambition is seen sparking a wave of necessary mergers among its over 130 securities firms, led by Citic Securities Co.
“Compared with either domestic banks, insurers, or their global peers, Chinese brokers are too small to play a meaningful role in the financial market,” said Jiang Zhongyu, a Shanghai-based analyst at Essence Securities. “The country’s capital market development calls for a heavyweight broker.” Taken together, China’s 131 brokers have assets that are equal to what Goldman Sachs sits on by itself. They are also far from being full-service investment banks, counting on mom-and-pop traders across the country to contribute much of their revenue.
PESO EXCHANGE RATES n US 50.7440
GOLDMAN Sachs Headquarters (left) and American Express Tower (right) stand in front of One World Trade Center in New York, March 1, 2019. MICHAEL NAGLE/BLOOMBERG
Past efforts to expand out from China have born little fruit. Citic’s highly touted attempt to build an international presence by buying Hong Kong brokerage CLSA Ltd. in 2012 faltered amid a wave of infighting and defections. China’s fifth-largest, Haitong Securities Co., gets a significant part of its revenue from Hong Kong, but has struggled with a unit in Europe. China International Capital Corp., though, is among the top 10 in global initial public offerings this year. The financial opening, which culminates in December next year when foreign securities firms are allowed to take 100-percent ownership of units in the country, is adding to the urgency of building a meaningful local player. UBS Group AG, JPMorgan Chase & Co., Nomura Holdings Inc. have already gained majority control of local joint ventures, while Goldman Sachs, Morgan Stanley and others have applied to follow suit in a bid to capture an estimated $9 billion in annual profits for brokers and banks. Continued on a2
n JAPAN 0.4629 n UK 65.9926 n HK 6.5162 n CHINA 7.2512 n SINGAPORE 37.4909 n AUSTRALIA 35.2569 n EU 56.3512 n SAUDI ARABIA 13.5238
Source: BSP (December 27, 2019 )