China Establishes a Giant Brokerage

The merger between Guotai Junan Securities gtja.com, with net assets of approximately $29 billion, and Haitong Securities htsec.com, which holds net assets of around $26 billion, will create a company with total assets of $236.9 billion.

This new entity will surpass Citic Securities cs.ecitic.com, currently China’s largest brokerage, which has net assets of approximately $39 billion. This initiative is part of a governmental strategy aimed at enhancing the competitiveness of the financial services sector. Mid-sized and large brokerages are seeking to scale up, improve long-term competitiveness, and optimize their operations. Both Guotai Junan and Haitong are controlled by Shanghai’s state asset management firm. These mergers are occurring in a context of salary reductions within the industry and increased government scrutiny over excesses in the financial sector.

The goal of Chinese financial institutions is to establish themselves on the global stage. This objective was outlined in a document issued by the State Council in April, aimed at supporting the stock market. Despite the net assets of Citic Securities, the country’s largest brokerage, being significantly lower than those of major Wall Street institutions such as Goldman Sachs goldmansachs.com and Morgan Stanley morganstanley.com, which hold net assets of $250 billion and $124 billion respectively, China aims to have ten world-class brokerages by 2029, with two or three of them being globally competitive by 2035.

Analysis of Technological Lethargy in Brazil

While China advances with vigorous mergers and consolidations in the financial sector, establishing itself as a significant power on the global stage, Brazil remains entangled in political and ideological debates that contribute little to the country’s economic or technological advancement. The technological lethargy that characterizes Brazil, especially concerning the modernization of its financial structures, highlights a lack of strategic vision that starkly contrasts with China’s proactive and dynamic approach.

Paradoxically, China operates like a pragmatic and hungry lion on the international stage, relentlessly seeking to expand its influence and competitiveness. However, within its borders, the country is progressively building a dense web of regulation and bureaucracy. This duality between external aggressiveness and increasing internal control reflects a complex strategy in which the state seeks to simultaneously secure its position in the global arena and reinforce its dominance over internal dynamics.

While China plans to have several internationally competitive brokerages by 2035, Brazil remains stuck in discussions that seem more focused on outdated ideologies than on fostering innovation and competitiveness in a globalized economy. The lack of significant investments in technology and the absence of a clear policy aimed at strengthening the financial sector are increasingly distancing Brazil from the advances observed in other nations, such as China, which continue to expand their influence on the international stage.

This discrepancy underscores the urgent need for Brazil to reassess its priorities, adopting a more assertive and modern stance toward technological development and integration with the global economy. Otherwise, the country risks remaining marginalized while other nations take the lead in the international arena.

Copyright:

Dr. Leandro Pinto,
Senior Attorney at
Dr. Leandro Pinto Law Firm

leandropinto.us