China can create its own Goldman Sachs, if Beijing curbs its instincts

Chinese brokerages are relatively unsophisticated beside their Wall Street rivals, focusing mostly on equities trading

An age-old question has reared its head again: Why can’t China create a globally competitive investment bank in the mold of Goldman Sachs Group Inc or Morgan Stanley?

It’s not like the country hasn’t tried. China International Capital Corp, a venture formed in 1995 with New York-based Morgan Stanley, foundered amid disputes between the local and US partners and slipped behind newer rivals without ever becoming a global heavyweight. Citic Securities Co made an unsuccessful attempt to buy into Bear Stearns Cos in 2007 (which was probably a lucky escape). Now add CLSA Ltd to the list of failures.

A common theme