China-US Political Cold War Financial Love | Blog Post

“Financial Times” Shanghai correspondent Thomas Kerr recently published a report on the topic “New Romance between Wall Street in the US and China.”

The Biden administration of the United States announced on June 1 that it would conduct a new investigation into the origin of the new crown virus, which was clearly aimed at China. On June 6, three American cross-party senators visited Taiwan on a military plane, showing that they were seeking opportunities from China. China and the United States have shown a new geopolitical cold war everywhere.

But at about the same time, on May 26, Chinese regulatory authorities approved the establishment of a joint venture wealth management company by Industrial and Commercial Bank of China and Goldman Sachs Group. The asset management department of Goldman Sachs owns 51% of the joint venture, and the remaining 49% will be held by the wealth management department of ICBC. It should be noted that ICBC has 680 million retail customers, which is more than twice the total population of the United States!

In an environment of intensified Sino-US geopolitical competition, the US government has been vigorously promoting the decoupling of Sino-US economic relations, but at the same time, the US financial industry has never been as close to China’s wealth as it is now. This has formed a satirical picture of “political cold war and financial love.”

After all, the Chinese market is extremely attractive. China’s growing asset management market can be said to be untapped. According to the “China Asset Management Market 2020” jointly released by China Everbright Bank and Boston Consulting Group at the beginning of last month, the scale of China’s asset management market reached 122 trillion yuan in 2020, an increase of nearly 10% compared with 2019. 60% of household assets are real estate assets, another 24% are cash and deposits, and only 16% of Chinese assets are invested. There is huge room for development among them. Goldman Sachs Group predicts that by 2030, the investable assets of Chinese households will reach 70 trillion U.S. dollars (about 448 trillion yuan), and there will be nearly three times the room for growth in the next nine years. Goldman Sachs plans to provide “cross-border” financial products to its customers, and JPMorgan Chase Group also pointed out that Chinese funds have “global potential.”

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