Morgan Stanley Plans Broader Push Into China

Despite Market Woes, Firm's Local Chief Expects Huge Growth
September 11, 2008
Rose Yu

SHANGHAI -- Morgan Stanley will continue to broaden its business in China despite a slowdown in the market, the chief executive of the U.S. investment bank's China operation said Wednesday.

"The market is obviously slowing down compared with 2007. But that doesn't mean the business is slowing down," Wei Sun Christianson said. "In the long run, we do believe China is going to be unstoppable; not only that, it will be unimaginable in terms of the pace of growth."

More than a decade after entering mainland China, Morgan Stanley has obtained a variety of business licenses, covering commercial lending, mergers and acquisitions advisory, and fixed-income investment.

To expand its mainland China business over the long run, Morgan Stanley will consider hiring local talent or moving people from Hong Kong, Ms. Christianson said.

Morgan Stanley established an office in China in the early 1990s, before helping to set up investment bank China International Capital Corp. with China Construction Bank Corp. in 1995.

In 2006, Morgan Stanley was granted a license to offer corporate-banking services through its wholly owned unit that is now known as Morgan Stanley Bank International (China) Ltd.

The Wall Street bank also plans to set up an investment-banking joint venture with Shanghai-based China Fortune Securities Co., people close to the deal said earlier. But failure to sell its 34% stake in China International Capital appears to have complicated Morgan Stanley's plan to pursue a new partnership with Fortune Securities, they said.

Ms. Christianson declined to comment on the new joint venture Wednesday.

"In the future, we hope to gain more licenses to offer Chinese clients a full suite of services that Morgan Stanley has offered around the globe," she said on the sidelines of a charity event for the city of Dujiangyan, one of the areas worst hit by a major earthquake in May.

In December, China Investment Corp., the state-run investment vehicle that manages China's $200 billion sovereign-wealth fund, paid $5 billion for a 9.9% stake in Morgan Stanley.