Chinese brokers pump US$5.6 billion offshore to fight Wall Street

Published Fri, Jun 5, 2026 · 04:41 PM

[BEIJING] Chinese brokerages are doubling down on international expansion with at least US$5.6 billion in planned capital injections this year, pressing ahead with Beijing’s ambitions to build world-class investment banks capable of rivalling Wall Street.

Guotai Haitong Securities, the nation’s largest brokerage by assets, approved a nine-billion-yuan (S$1.7 billion) capital boost for its offshore unit, Guotai Haitong Financial, to expand its international business, based on an exchange filing released on Thursday (Jun 4).

Citic Securities, the second-largest broker, also announced last week that proceeds from a planned share placement in Hong Kong will be used entirely for overseas expansion. That includes a capital injection of as much as 16 billion yuan into Citic Securities International.

Brokers are prioritising overseas growth to escape intensifying competition in the domestic market, where a deal slump and overcapacity have squeezed returns.

Meanwhile, Hong Kong, the primary springboard for their global ambitions, has experienced an initial public offering resurgence. Goldman Sachs estimated that the city’s exchange will host a record US$110 billion in IPOs and follow-on share sales this year.

“It’s become an inevitable trend for brokerages to deepen their international business layout, given the policy tailwind and their own development needs,” Sinolink Securities analysts, led by Shu Siqin, wrote in a note in May.

“The higher leverage and return on equity from offshore business will become a key driver for brokerages to unlock their long-term growth potential.”

Other top firms are also beefing up abroad. Huatai Securities and GF Securities revealed this year that their offshore units will receive a combined HK$15.1 billion (S$2.5 billion).

The capitalisation push aligns with Beijing’s blueprint to cultivate elite investment banks that can go head-to-head with global heavyweights, such as Goldman Sachs and Morgan Stanley.

That regulatory push is accelerating industry consolidation, highlighted by the mega-merger that created Guotai Haitong and China International Capital’s recent acquisition of two smaller rivals.

The push comes as Chinese authorities launched an unprecedented regulatory crackdown on cross-border investment flows, as Beijing grew increasingly concerned about unregulated capital outflows.

Chinese individuals, companies and financial institutions moved an estimated US$807 billion out of the country in 2025, the highest on record, said the Institute of International Finance.

Guotai Haitong said the injection will enable it to further solidify the company’s edge in cross-border financing.

Citic has said that the proceeds will be used for capital intermediary businesses including equity derivatives, commodities and fixed income, as well as beefing up the capital strength of its overseas licensed subsidiary and reducing financing costs.

The move will also help expedite the firm’s effort to develop into a world-class investment bank, according to its filing. The firms declined to comment. BLOOMBERG