Nomura to shut branch in China as it scales back wealth business
Nomura is closing one of its four branches in China, as the Japanese securities firm scales back its wealth management business in the mainland after years of losses.
The company's brokerage subsidiary plans to shut its branch in Zhejiang province by the end of the year, people familiar with the matter said, asking not to be identified as the matter is private. A Tokyo-based spokeswoman declined to comment.
The closure comes four years after Nomura announced the opening of the office in late 2021, when it was pushing to expand in areas that are home to rich Chinese. Japan's biggest brokerage had targeted wealth management as a key area for growth in China, but the business has struggled under President Xi Jinping's "common prosperity' drive, a slowing economy and stiff competition.
Shanghai-based Nomura Orient International Securities has posted losses every year since it was formed in 2019. The venture's loss narrowed 30% to 128.7 million yuan ($18 million) in the year ended Dec. 31, making the second straight year of improvement.
Nomura has been curtailing its original focus on China wealth to prioritize an expansion in brokerage and asset management, it was reported in April.
Global banks have also been tempering their ambitions in China's $69 trillion financial services industry, five years after its opening ushered in a wave of investment by firms including JPMorgan Chase and UBS. Mounting trade tensions under U.S. President Donald Trump are adding to the uncertainty.
Zhejiang is a wealthy province on China's east coast that's home to e-commerce giant Alibaba as well as the city of Yiwu, a manufacturing hub that exports globally. Nomura's majority-owned venture with Oriental International and Shanghai Huangpu Investment Holding has branches in Shanghai, Beijing and Shenzhen as well.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
NHK
2 hours ago
- NHK
US tariffs leave Indonesia drowning in Chinese imports
After the US imposed steep tariffs on China, a surge of low-cost exports was redirected to Southeast Asia, with Indonesia bearing the brunt. Now, local businesses are collapsing under the pressure as they struggle to survive.
Japan Times
3 hours ago
- Japan Times
Can big stars bring higher-spending tourists back to Hong Kong?
The sisters from southwestern China arrived in Hong Kong on a recent holiday, aiming to see as much as they could — in less than 12 hours. Carrying only a small bag each, Hu Di, 30, a bank worker, and Hu Ke, 20, a student, sampled beef noodles in the Central business district, took turns posing for sunset photos at a waterfront promenade, then captured the city's illuminated skyline after dark. Buying only medicinal oils and retro comics as souvenirs, they spent less than $150 in the day and went back across the mainland China border to stay the night. The sisters are part of a wildly popular trend among mainland Chinese who call themselves "special forces tourists': independent travelers who get in and out of the city as quickly and cheaply as possible. Tourists at a taxi stand in Hong Kong on May 5. Tourists from China's mainland are spending less time and money in Hong Kong of late, and the financial hub's recent history of protests and security crackdowns is making it a challenge to draw travelers from other countries. | Anthony Kwan / The New York Times Mainland Chinese make up more than three-quarters of all tourists in the financial hub. But while they were once big spenders in Hong Kong — buying luxury watches, handbags and designer clothes — they now spend less time and money. That is a challenge to the city's efforts to revive a travel economy hurt by years of anti-government protests, pandemic restrictions and concerns in the West over a national security crackdown. Hong Kong, which once billed itself as Asia's World City, is now seeking to brand itself as the region's events capital, emphasizing concerts and trade shows over shopping, to give travelers reasons to return and to spend more. This year, it unveiled a $4 billion sports park at the site of the city's former airport, Kai Tak. Its centerpiece is a purple-hued stadium with air conditioning under each of its 50,000 seats. It was almost at capacity during an annual Rugby Sevens tournament in late March. Featuring teams from around the world, the tournament drew overseas visitors like Salome Bale, 49, a pharmacy worker from New Zealand. The new stadium left her speechless, she said, adding that the state-of-the-art facilities and the thrumming atmosphere made the games the experience of a lifetime. People gather outside Kai Tak Stadium before a concert in Hong Kong on April 27. | Anthony Kwan / The New York Times The next month, kaleidoscopic visual effects were projected on its retractable roof during four sold-out nights of concerts by the band Coldplay. Some events are backed by a Mega Arts and Cultural Events Fund the government started in 2023, pledging up to $1.9 million in subsidies for approved events. The government is also supporting several high-profile soccer games, including a recent exhibition match involving Manchester United. "You miss us, you come back. And then when you come, you like it again, you become one of our old friends,' Rosanna Law, the city's new secretary for culture, sports and tourism, said in an interview. Tourism spending has been inching up since the pandemic, making up 2.6% of Hong Kong's economic output in 2023, the most recent data available. But that is still far from the government's target of 5%, which would be a little higher than prepandemic levels. Industry experts say the challenge for Hong Kong is distinguishing itself from other Asian cities like Singapore and Bangkok, which have for years offered incentives to attract A-list stars, business conferences and sports tournaments. A concert by Cantopop singer Nicholas Tse at Kai Tak Stadium in Hong Kong on April 25 | Anthony Kwan / The New York Times "Their strategy is very similar. That is a big problem for Hong Kong,' said Gary Bowerman, who heads a travel and tourism research firm called Check-in Asia. Singapore has invested heavily to host marquee events such as an annual Formula One race and exclusive deals with undisclosed price tags for huge stars like Taylor Swift and Lady Gaga. While such events help draw tourists who otherwise would not have visited, governments should not become too reliant on them, said Donald Low, a senior lecturer at the Hong Kong University of Science and Technology's Institute for Public Policy. "Even for Singapore, you don't get somebody like Taylor Swift every year,' he said. "And even if you do, how many days of the year is it?' Hong Kong has also had to weather blows to its international reputation, with the United States and other Western nations warning its travelers of potential risks after Beijing imposed a national security law in 2020 that broadly criminalized political dissent. The trade war between the United States and China has added to uncertainties. Rosanna Law, the city's new secretary for the Culture, Sports and Tourism Bureau, at government offices in Hong Kong on April 27 | Anthony Kwan / The New York Times There were fewer visitors to Hong Kong from almost every part of the world in 2024 compared with 2018, according to the latest government data. Stuart Bailey, chair of the Hong Kong Exhibition and Convention Industry Association, said that many businesspeople from Europe and the United States whom he had spoken to had negative impressions about the city. "It's a good strategy, trying to put Hong Kong on the map to get people to come here,' he said. "I think it is the right thing because there's a lot of misunderstanding.' Law defended Hong Kong's openness. "As long as you are law-abiding, as long as you are a genuine, proper tourist, you'll be having a good time in Hong Kong,' she said. The city is courting higher-spending visitors from regions like Southeast Asia and the Middle East. Whereas the city's allure was once as a Westernized city on the tip of China, it is now embracing its closer relationship to nearby Chinese cities. Law said Hong Kong would keep working with mainland Chinese authorities to promote travel to the city as part of regional tours that include cities such as Guangzhou and Shenzhen. Hong Kong is now seeking to brand itself as the region's events capital, emphasizing concerts and trade shows over shopping, to give travelers reasons to return and to spend more. | Anthony Kwan / The New York Times Drawing more tourists is increasingly important, as many Hong Kong residents now flock to the mainland on weekends and holidays for cheaper entertainment. (Over China's five-day Golden Week holiday in early March, around 1.1 million tourists arrived in Hong Kong, but more than 1.68 million Hong Kong residents left the city.) Given that exodus, "it's important to know that we are building a relationship with the people that are coming in,' said Michael Denmark, the owner of the company that operates a giant Ferris wheel on the waterfront. About 85% of the wheel's 2.5 million visitors over the past 12 months came from mainland China, he said. Most of those were from the region of about 80 million people that surrounds Hong Kong, known as the Greater Bay Area. Denmark, testing Chinese appetite for spending on more costly attractions, is currently coproducing a monthlong show by Cirque du Soleil. Ticket prices, from about $60 to $250, are significantly higher than the sponsor-subsidized $2.50 fare to ride the Ferris wheel. He was partnering with Chinese social media and travel companies, and has dedicated marketing teams targeting different audiences, including travelers from China. Corporate sponsors "all have very much their eyes wide open and their arms open to embrace everybody from Greater Bay and beyond in China,' he said. This article originally appeared in The New York Times © 2025 The New York Times Company
Japan Times
4 hours ago
- Japan Times
BYD unleashes an EV industry reckoning that alarms Beijing
The price war engulfing China's electric vehicle industry has sent share prices tumbling and prompted an unusual level of intervention from Beijing. The shakeout may just be getting started. For all the Chinese government's efforts to prevent price cuts by market leader BYD from turning into a vicious spiral, analysts say a combination of weaker demand and extreme overcapacity will slice into profits at the strongest brands and force feebler competitors to fold. Even after the number of EV makers started shrinking for the first time last year, the industry is still using less than half its production capacity. Chinese authorities are trying to minimize the fallout, chiding the sector for "rat race competition' and summoning heads of major brands to Beijing last week. Yet previous attempts to intervene have had little success. For the short term at least, investors are betting few automakers will escape unscathed: BYD, arguably the biggest winner from industry consolidation, has lost $21.5 billion in market value since its shares peaked in late May. "What you're seeing in China is disturbing, because there's a lack of demand and extreme price cutting,' said John Murphy, a senior automotive analyst at Bank of America. Eventually there will be "massive consolidation' to soak up the excess capacity, Murphy said. A drone view shows a BYD vessel at the Itajai port in Santa Catarina, Brazil, on May 28. | REUTERS For automakers, relentless discounting erodes profit margins, undermines brand value and forces even well-capitalized companies into unsustainable financial positions. Low-priced and low-quality products can seriously damage the international reputation of "Made-in-China' cars, the People's Daily, an outlet controlled by the Communist Party, said. And that knock would come just as models from BYD to Geely, Zeekr and Xpeng start to collect accolades on the world stage. For consumers, price drops may seem beneficial but they mask deeper risks. Unpredictable pricing discourages long-term trust — already people are complaining on China's social media, wondering why they should buy a car now when it may be cheaper next week — while there's a chance automakers, as they cut costs to stay afloat, may reduce investment in quality, safety and after-sales service. Auto CEOs were told last week they must "self-regulate' and shouldn't sell cars below cost or offer unreasonable price cuts, according to people familiar with the matter. The issue of zero-mileage cars also came up — where vehicles with no distance on their odometers are sold by dealers into the second-hand market, seen widely as a way for automakers to artificially inflate sales and clear inventory. Chinese automakers have been discounting a lot more aggressively than their foreign counterparts. Murphy said U.S. automakers should just get out. "Tesla probably needs to be there to compete with those companies and understand what's going on, but there's a lot of risk there for them.' Others leave no room for doubt that BYD, China's No. 1 selling car brand, is the culprit. "It's obvious to everyone that the biggest player is doing this,' Jochen Siebert, managing director at auto consultancy JSC Automotive, said. "They want a monopoly where everybody else gives up.' BYD's aggressive tactics are raising concerns over the potential dumping of cars, dealership management issues and "squeezing out suppliers,' he said. The pricing turmoil is also unfolding against a backdrop of significant overcapacity. The average production utilization rate in China's automotive industry was mere 49.5% in 2024, data compiled by Shanghai-based Gasgoo Automotive Research Institute shows. An April report by AlixPartners, meanwhile, highlights the intense competition that's starting to emerge among new energy vehicle makers, or companies that produce pure battery cars and plug-in hybrids. In 2024, the market saw its first ever consolidation among NEV-dedicated brands, with 16 exiting and 13 launching. "The Chinese automotive market, despite its substantial scale, is growing at a slower speed. Automakers have to put top priority now on grabbing more market share,' Ron Zheng, a partner at global consultancy Roland Berger, said. Jiyue Auto shows how quickly things can change. A little over a year after launching its first car, the automaker jointly backed by big names Geely and technology giant Baidu began to scale down production and seek fresh funds. A BYD dealership in Beijing | Bloomberg It's a dilemma for all carmakers, but especially smaller ones. "If you don't follow suit once a leading company makes a price move, you might lose the chance to stay at the table,' AlixPartners consultant Zhang Yichao said. He added that China's low capacity utilization rate, which is "fundamentally fueling' the competition, is now even under more pressure from export uncertainties. While the push to find an outlet for excess production is thrusting more Chinese brands to export, international markets can only offer some relief. "The U.S. market is completely closed and Japan and Korea may close very soon if they see an invasion of Chinese carmakers,' Siebert said. "Russia, which was the biggest export market last year, is now becoming very difficult. I also don't see Southeast Asia as an opportunity anymore.' The pressure of cost cutting has also led analysts to express concern over supply chain finance risks. A price cut demand by BYD to one of its suppliers late last year attracted scrutiny around how the car giant may be using supply chain financing to mask its ballooning debt. A report by accounting consultancy GMT Research put BYD's true net debt at closer to 323 billion yuan ($45 billion), compared with the 27.7 billion yuan officially on its books as of the end of June 2024. The pain is also bleeding into China's dealership network. Dealership groups in two provinces have gone out of business since April, both of them ones that were selling BYD cars. Beijing's meeting with automakers last week wasn't the first attempt at a ceasefire. Two years ago, in mid 2023, 16 major automakers, including Tesla, BYD and Geely signed a pact, witnessed by the China Association of Automobile Manufacturers, to avoid "abnormal pricing.' Within days though, CAAM deleted one of the four commitments, saying that a reference to pricing in the pledge was inappropriate and in breach of a principle enshrined in the nation's antitrust laws. The discounting continued unabated.
