I was impressed that UBS had a good strategy for partnering with a domestic firm in China, and that they had been able to jump through all the regulatory hoops to actually make the purchase.
But now it's looking like that good strategy might end up being a great one, because China just turned off the spigot and will not allow any more international banks to come in and open brokerages or buy existing ones, primarily because they want to give the domestic industry a chance to get going without the very tough competition that Citibank (C), Merrill Lynch and others would provide.
Now, I haven't heard anything final on this, but it sounds to me like this means a block of new openings or purchases, not a recission of existing deals.
And if that's true, that would mean that among the global titans, only Goldman Sachs (GS) and UBS would have brokerage operations in China. Even if it's only for a year or two as the government gives the local brokers a chance to build their systems and clientele (which seems to be the assumption of most analysts, who believe China desperately needs foreign expertise in this area), that seems to me to be a huge advantage with more opportunity to build a clientele, and more opportunity to become familiar with and influence local rules and regulations before the strongest competitors have another chance to get involved.