Despite the Trade War, the U.S. and Chinese Economies Aren’t ‘Decoupling,’ Goldman’s Strategy Chief Says

The top strategist at one of America’s most China-savvy investment banks says she’s skeptical of the oft-heard assertion that the world’s two largest economy’s are “decoupling.”

Stephanie Cohen, chief strategy officer for Goldman Sachs, told the Fortune Global Tech Forum in Guangzhou Thursday she thinks claims the U.S. and China are unwinding decades of collaboration in finance, technology, and trade are overdone.

Cohen, who also oversees GS Accelerate, an in-house incubator launched by Goldman last year, said her recent discussions about opportunities for the firm and its clients in areas such as robotics, artificial intelligence, and financial services, suggest the two nations remain actively engaged even as their government’s bicker. 

Cohen noted that, in a visit to Shenzhen immediately prior to the Forum, she had encountered investors, entrepreneurs, and engineers from around the world searching for Chinese partners and keen to take advantage of the Chinese tech hub’s unique manufacturing ecosystem.

“It’s not that we’re decoupling,” she said. “If you sit on the ground and you’re talking to companies, people are continuing to talk about ways that they can do business together.”

Goldman has pursued business opportunities in China for more than two decades. In 2004, the firm became one of the first Wall Street banks granted permission to set up an investment banking venture in China. That approval came after Goldman donated $60 million to bail out depositors in Hainan Securities, a troubled but politically connected Chinese brokerage.

In August, Goldman applied to the China Securities Regulatory Commission to boost its stake in that venture, Goldman Sachs Gao Hua Securities, to 51%—the maximum permitted—up from the current 33%. Cohen said Goldman looks forward to gaining full control of Gao Hua. “We’re engaged in a process, like most large U.S. banks, focused on getting to 51% and ultimately to 100%,” she said.

Western banks have long bemoaned Beijing’s unwillingness to grant them control over their China-based joint ventures. Full control, Western banks argue, would allow them to offer a broader range of services, leverage their global resources and thereby increase market share in the world’s second-largest banking market.  

Goldman claims managerial control over the joint venture, which gives it an edge over nearly all its Western competitors. Legally, however, securities, equities trading, and research functions rest with Goldman’s Chinese partner, Beijing Gao Hua Securities, an entity controlled by veteran Chinese dealmaker Fang Fenglei—who financed his side of the partnership with money borrowed from Goldman.

Goldman rivals UBS, JPMorgan, and Nomura all have won approval to secure a controlling stake in their China-based ventures.

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