| China International Capital Corporation (CICC) is China's first international investment bank to receive a licence from the central bank, the People's Bank of China (PBOC). Capitalized at $100 million, it was officially launched at a ceremony in Beijing's Diaoyutai State Guest House last October. It also marks the first time in its 61-year history that Morgan Stanley has entered into a formal joint-venture agreement. The Wall Street house broke a lot of its own rules to do so. "Historically we have had no interest in going into developing markets like China which are still largely closed to cross-border investment," says John Wadsworth, chairman of Morgan Stanley Asia in Hong Kong. In almost the same breath he concedes that it is a chancy gamble: "Going ahead with CICC in a climate in which joint ventures are notoriously difficult to get right ... people could almost question our sanity." While mostly too polite to make such accusations on the record, some observers do query Morgan Stanley's timing. "It looks ambitious at the moment. We believe it is premature to look at joint ventures in China," says Trevor Rowe, chairman and co-chief executive officer of the Asia-Pacific region of Salomon Brothers Hong Kong. Ill-conceived |