Credit Suisse Aims To Create China Venture

Credit Suisse Group has reached a deal to form an investment-banking joint venture in China, which could portend greater access for foreign companies to the nation's booming -- but largely closed -- financial markets.

If approved by Chinese regulators, the Swiss bank's proposed venture with Founder Group, a Beijing-based conglomerate, would be among the first to take advantage of a long-promised opening. The China Securities Regulatory Commission has promised to lift its moratorium on approving new joint ventures with foreign securities firms this year.

Securing such market openings for financial companies has been a priority for U.S. Treasury Secretary Henry Paulson, who is traveling to Beijing in the coming week for his latest round of talks with Chinese officials on economic and trade policy.

Financial firms have been positioning for months ahead of Mr. Paulson's visit, and other deals also could be in the works.

The partnership between Credit Suisse and Founder was announced to Credit Suisse employees in an internal memo Friday seen by The Wall Street Journal.

'The strategic relationship between Credit Suisse and Founder Group includes a proposed joint venture in A-share underwriting, corporate advisory, and research,' the memo reads.

The joint venture, if it comes through, would be a prize for Paul Calello, 46 years old, who has been pursuing such a deal since becoming the bank's Asian-Pacific chief executive in 2002. He was named chief executive of the investment bank earlier this year and is due to end his Asian responsibilities at the end of the month. During his tenure, Credit Suisse won roles on the world's largest stock deals including the $21.9 billion initial public offering of stock in Industrial & Commercial Bank of China Ltd., and the $9.2 billion IPO of China Construction Bank Corp.

'We've been looking for the right opportunity to be able to participate in the domestic market,' said Mr. Calello, in an interview. 'More and more Chinese companies are looking to do both onshore and offshore capital-raising.'

Stock underwriting is an increasingly lucrative business in China, as a market surge has encouraged the government to list more and bigger companies. Through the end of November, IPOs on the domestic markets have raised $53.56 billion, according to Thomson Financial, putting the Shanghai Stock Exchange at the top of the IPO charts globally.

And with domestic firms handling almost all offerings for Class A shares, as they are known, the urgency for Wall Street investment banks to get access to the market has been growing. They still handle most Chinese IPOs in Hong Kong, but such deals have raised only $22.95 billion so far this year, down 32% from the same period in 2006, according to Thomson Financial.

Wall Street firms have spent years on the often-tortuous road to setting up operations in China. Since the 1990s, Morgan Stanley has owned about 34% of China International Capital Corp., which dominates underwriting in China. But the U.S. firm has in recent years become a passive investor, and has been looking for another domestic partner. A Morgan Stanley spokeswoman based in Hong Kong declined to comment.

In 2004, the Chinese government also permitted Goldman Sachs Group Inc. to establish a venture in China, and a year later UBS AG agreed to buy into a local brokerage. But in late 2005, Chinese securities regulators stopped accepting new applications for foreign joint ventures, and moved to restructure the domestic industry.

China has been nervous about allowing foreign access to the securities business because there are few entrenched domestic companies to compete with experienced foreigners, according to industry officials and regulators.

And even if China does approve new foreign ventures in investment banking, that would still leave the foreign banks short of their goal to build businesses that could trade stocks on China's Shanghai and Shenzhen exchanges. Investment banking generates fees deal by deal, while brokerage services can generate continuing streams of income.

There are also openings for foreign firms in fund management and other businesses. Credit Suisse, for instance, owns a 25% stake in an asset-management venture with Industrial & Commercial Bank of China and another Chinese firm.

Credit Suisse's new partner, Founder Group, was established in 1986 by Peking University. It is best known for its businesses making computers, printing systems and other electronics, but also owns a local brokerage, Founder Securities. A spokesman for Founder Group in Beijing said he was unaware of the deal.

Even as foreigners have been kept out of China, Chinese firms have started to court partners in markets overseas, including on Wall Street. In October, China's largest brokerage, Citic Securities Co., announced a reciprocal investment plan with Bear Stearns Cos., then under pressure in the wake of its exposure to the imploding subprime-mortgage market. The deal promises no immediate access to mainland markets and instead will be focused elsewhere, including Hong Kong.

瑞士信贷集团(Credit Suisse Group)已和方正集团(Founder Group)就在中国成立一家合资投行达成协议，这预示着外资企业将进一步打入中国蓬勃发展、但基本仍处封闭状态的金融市场。

如果获得中国监管部门批准，瑞士信贷和方正的联姻将成为中国开放金融市场的承诺终于开始兑现后的首批产物。今年，中国证券监督管理委员会(China Securities Regulatory Commission, 简称：中国证监会)已经取消了此前有关推迟批准本土企业与外资券商成立合资公司的规定。

敦促中国政府开放金融市场一直是美国财政部长鲍尔森(Paulson)的工作重点，他将于下周访问北京，参加新一轮美中经济和贸易对话。

金融企业在鲍尔森此行前的几个月就已在摩拳擦掌了，目前还有几项类似交易正在酝酿之中。

瑞信和方正的合作已于上周五以内部备忘录的形式向瑞信员工作了通报。

《华尔街日报》记者见到的这份备忘录称，瑞信和方正之间的战略合作包括成立一家合资企业，从事A股承销、企业咨询及研究工作。

若该合资公司得以成立，则应归功于瑞信亚太地区首席执行长柯磊洛(Paul Calello)。现年46岁的柯磊洛自从2002上任以来一直在努力促成这类交易。柯磊洛今年早些时候已经被任命为瑞信投行业务的首席执行长，即将于本月卸任该公司亚太地区首席执行长一职。在他任期之内，瑞信成功地赢得了全球几大首次公开募股(IPO)的承销权，其中包括融资规模219亿美元的中国工商银行(Industrial and Commercial Bank of China) IPO，以及筹资92亿美元的中国建设银行(China Construction Bank) IPO。

柯磊洛在接受采访时表示，瑞信一直在寻找合适时机以打入中国内地市场，越来越多的中国企业正希望从本土及海外两个资本市场筹集资金。

在中国，股票承销的盈利空间越来越大，因为股市的红火表现促使政府批准更多、更大的公司上市。Thomson Financial提供的数据显示，截至11月底，在中国内地股市进行的IPO共融资535.6亿美元，上海证交所的IPO规模已在全球市场中成为佼佼者。

由于目前发行的A股几乎全部为中国本土金融机构所承销，华尔街投行要求进入中国内地市场的呼声越来越强烈。此外，中资企业在香港发行H股时，内地投行也赢得了其中大多数的承销权。不过，Thomson Financial的数据显示，今年迄今中资企业在港IPO共融资229.5亿美元，较上年同期减少了32%。

华尔街投行花费了数年时间、经历了诸多周折才建立起了在华业务。从上世纪九十年代起，摩根士丹利(Morgan Stanley)即持有了中国国际金融有限公司(China International Capital Corp.)约34%的股权，后者在中国承销业务中占据龙头地位。不过近几年来摩根士丹利已经退变成了一个被动投资者，它一直在物色另一家本土合作伙伴。摩根士丹利驻香港的发言人拒绝就此置评。

2004年，中国政府批准了高盛集团(Goldman Sachs Group)在华成立合资企业；一年后瑞士银行(UBS AG)也获准入股一家本土经纪公司。不过，2005年年底时，中国证券监管机构就不再受理成立合资企业的申请，并开始着手重组国内证券业。

中国对外资进入内地证券业一直感到不安，据业内官员和监管部门表示，这是因为几乎没有哪家本土公司有能力与经验丰富的外国同行们一争高下。

此外，即便中国政府批准成立新的合资投行，这与外资银行的目标──建立可在上海和深圳证交所进行股票交易的子公司──仍有距离。投行从其承揽的每宗交易中收取服务费，而经纪服务则可以保证收入的源源不断。

中国政府还向外资银行开放了基金管理等其他业务。以瑞信为例，该行在与中国工商银行和其他中资企业组建的资产管理公司中拥有25%的股权。

此次瑞信的新合作伙伴方正集团是由北京大学于1986年成立的一家大型企业集团。其最知名的业务是商用电脑、印刷系统及其他电子产品的制造，该公司也拥有一家本土经纪公司，名为方正证券有限责任公司(Founder Securities Co.)。方正集团驻北京的发言人表示他不清楚这桩交易。

在外资企业被拒之门外的同时，中国企业却开始在海外寻求合作伙伴，其中就包括华尔街投行。今年10月份时，中国最大的经纪公司中信证券股份有限公司(Citic Securities)与贝尔斯登(Bear Stearns)宣布了互相持股计划，后者当时正因其在次级抵押贷款市场中投资而承受着压力。该交易并未就立即进入大陆金融市场做出承诺，其关注重心放在了香港等其他市场之上。

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