America’s bulge bracket financial institutions invested heavily in China in 2020 despite worsening Sino-US relations during the spread of the COVID-19 pandemic.
The big five US banks, which include Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase & Co and Morgan Stanley, saw their exposure to the Chinese market rise 10% YoY in 2020 to hit USD$77.8 billion, according to a report from Bloomberg.
Goldman Sachs alone saw its “cross currency outstanding” – which encompasses a range of cash and financing to both companies and government entities, surge 33% in 2020 to hit $17.5 billion.
US banks are far from alone in their ambitions to step up operations in China. British multinational HSBC Holdings plans to invest at least $6 billion in the Asia-Pacific as a whole, while Barclays CEO Jes Staley said earlier in March that the bank hopes to expand its modest presence in China and continue to make further acquisitions in capital markets.
UBS Group plans to double its presence in China over the next three to five years, while Credit Suisse Group has has flagged its intention to obtain complete control over its Chinese securities venture and double staff numbers.
The ongoing expansion in the presence of American and European banks in China arrives during a nadir in Sino-US relations, with tensions becoming especially heightened during the peak of the COVID-19 pandemic.
China has nonetheless continued to reiterate its commitment to the opening up of the domestic financial sector to foreign players – a position it first began to heavily stress at the Bohai Forum back in early 2018.