Goldman Sachs was poised to triumph in China. What happened?

Goldman Sachs was poised to triumph in China. What happened?

For Goldman Sachs, taking control of its Chinese joint venture was meant to be the culmination of 30 years of work and a ticket to future riches.

“One hundred per cent ownership of our franchise on the mainland represents a significant commitment to and investment in China,” the Wall Street bank said in a December 2020 memo, signed by chief executive David Solomon, which pointed to “ongoing reforms under way in China’s capital markets, continued robust economic growth and the expanding needs of increasingly sophisticated clients”.

Ten months on, Goldman’s position in the country looks much less secure. In June, the bank was lead underwriter on the disastrous initial public offering of Chinese ride-hailing company Didi. In August, rival JPMorgan Chase leapfrogged Goldman to become the first western bank approved to own a Chinese securities business. Meanwhile, the investment banking opportunities have dimmed as Beijing cracks down on the biggest Chinese companies.

For decades, Goldman has cultivated relationships in China. Former chief executive Hank Paulson flew to China in 1992 to meet Jiang Zemin a year before he became president and subsequently made dozens of visits to the country.

In the years that followed, Goldman would become the first Wall Street firm to secure