The Communist Chinese government views banking as a core industry, the securities business a core concept of banking. Their domestic sector has therefore been given preference and protection despite market reforms adopted elsewhere in China’s economy. Foreign bank presence has been ostensibly nothing, a fact that the government I believe wanted as a measure of symbolic openness rather than head toward manifest recharacterization.

The first to attempt the China allure was Morgan Stanley. The rules compelled any foreign bank presence take the form of a Joint Venture (JV) with a local Chinese firm (among other often draconian requirements), with that local bank or broker retaining the majority stake. Morgan Stanley’s adventure with China Fortune Securities began on December 7, 2007, not exactly fortuitous timing for its conception.

It was actually the second time the Wall Street firm had tried in China. Back in 1995 when the Asian tiger first opened itself to any kind of foreign presence, it made a sizable investment in China International Corp, or CICC. It was never anything more than a passive venture over which Morgan Stanley exercised no control, not even the opportunity to sell its products under CICC banners.

Morgan Stanley eventually sold its shares in 2010 (Morgan also had its own problems).

The lack of significant progress remained an impediment for greater penetration. JP Morgan had established JP Morgan First Capital as a minority JV in 2010, but late last year decided it just wasn’t progressing the way the American bank had hoped (JPM also has its own problems). It generated minimal profits but for who really knows what risks. It was sold last October.

With President Trump in China this week, Chinese officials announcing relaxed restrictions on foreign securities practices. Rumors had been leaked some time ago, so the timing of the announcement as well as some of the details was all that remained to clear up. Still, this was a big step.