Goldman Sachs to Pursue 100% Ownership of Subsidiary in China

First Case of Global Bank Upon Regulatory Approval

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Goldman Sachs Group has applied to Chinese regulatory authorities to secure 100% ownership of its Chinese joint venture, Goldman Sachs Gao Hua, the Wall Street Journal (WSJ) reported on the 7th (local time). If the regulators give final approval, Goldman Sachs will become the first global bank to fully own a subsidiary in China.

Based on an internal memo, WSJ reported that Goldman Sachs has signed a contract to acquire the 49% stake in Goldman Sachs Gao Hua that it does not currently own, pushing to secure 100% ownership. WSJ evaluated this as "strengthening its investment 17 years after forming a joint venture with a Chinese partner."

Goldman Sachs has been working to expand its joint venture stake since early this year. In January, it increased its stake from 33% to 51% and announced plans to double its China headquarters staff over the next five years. This is because the Chinese government decided to allow foreign investment banks full equity control by the end of this year. If Goldman Sachs fully acquires its Chinese subsidiary, it plans to rename it Goldman Sachs China Securities.

In addition to Goldman Sachs, global investment banks such as JP Morgan and Swiss investment bank UBS are also increasing their investments in the Chinese financial market.

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