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China Merges Brokerages for Global Ambitions
19 Apr
Summary
- Two Shanghai brokerages to merge, forming an $86 billion asset firm.
- This consolidation aligns with China's goal of creating world-class investment banks.
- Beijing aims for 2-3 globally competitive Chinese investment banks by 2035.
Two Shanghai government-backed brokerages, Orient Securities Co. and Shanghai Securities, are set to merge, forming a combined entity with roughly $86 billion in assets. This union is a significant step in China's national strategy to consolidate its securities industry and develop formidable, world-class investment banks.
The proposed acquisition involves Orient Securities taking a full stake in Shanghai Securities through a mix of A-share issuance and cash. As of the end of 2025, their combined assets reached approximately 583 billion yuan. This follows a trend of consolidation, including the 2024 merger that created Guotai Haitong Securities Co.
Beijing's ambition is to cultivate domestic investment banks capable of competing with global leaders like Goldman Sachs. The push for consolidation gained momentum after President Xi Jinping's 2023 directive. The securities regulator supports this, with a target of establishing two to three globally competitive firms by 2035.
Recent months have seen increased activity, with Guotai Junan Securities and Haitong Securities combining in 2024, and China International Capital Corp. announcing plans to absorb two smaller rivals in December. Trading of Orient Securities' A-shares was suspended starting Monday for up to ten trading days.
