The rise of China has not only transformed the global landscape of the financial industry, but it has also changed an American banker’s nationality.
Some in Hong Kong’s financial community were surprised by an e-mail from one of the most veteran investment bankers in the city on Tuesday night. Marshall Nicholson, a managing director in charge of investment banking in Hong Kong for China International Capital Corporation (CICC) told his colleagues and friends that he had officially renounced his United States citizenship and would soon receive a HKSAR passport.
“I am very proud to say I have become Chinese,” said Nicholson in the e-mail, which was seen by the South China Morning Post and spread quickly in the local banking world on Tuesday night.
Nicholson, whose wife is a Hongkonger, first came to the city about 11 years ago from the US where he was an investment banker with some legendary Wall Street firms including JP Morgan and Merrill Lynch.
Prior to his current job as one of the top investment bankers at the homegrown securities firm CICC, he worked for BOC International (BOCI), Australia’s top investment bank Macquarie and Credit Suisse in Hong Kong.
BOCI, led by Li Tong, the daughter of recently retired Chinese propaganda chief Li Changchun, is the investment banking arm of Bank of China, one of China’s Big Four state-owned banks. Li Changchun was fifth-ranked official on the mainland when he was in office.
When BOCI hired Nicholson as the vice chairman of its investment banking business about six years ago, he was one of the first most senior foreign hires at a mainland financial institution. Since then, other mainland firms such as China Construction Bank, another Big Four firm, and CITIC Securities, the mainland’s top brokerage, also grabbed more foreign bankers from their Western rivals amid Beijing’s push to make its domestic industry leaders more international.
The 2008 financial crisis that originated on Wall Street changed the global landscape of financial industry significantly. Some legendary institutional names including Bear Stearns and Lehman Brothers became history, and more Chinese names such as CICC and CITIC rapidly climbed up the league table for deal-making.
Beijing-headquartered CICC is the mainland’s first investment banking joint venture, and it is currently led by Levin Zhu, son of former Chinese premier Zhu Rongji.
In the e-mail to his friends and colleagues, Nicholson said he went to the US Consulate General in Hong Kong to give up his American passport because he wanted to “make my situation reflect my personal and professional view of my long-term interests”.
“At the same time, I have officially received naturalisation as a Chinese national,” he said, adding he would soon get his passport of Hong Kong Special Administrative Region (HKSAR).
Hong Kong returned to Beijing rule in 1997. Since then, the city, known as a special administrative region, is run under the well-known “one country, two systems” model. According to current laws, any foreign national with permanent resident status in Hong Kong may apply to the Hong Kong Immigration Department for naturalisation as a Chinese national and may also apply for a HKSAR passport.
In Hong Kong, Nicholson is not the first foreigner to renounce his original citizenship, but such things rarely happen to people in the banking world.
The most well-known case may be Allan Zeman, a Hong Kong business tycoon, who in 2008 renounced his Canadian citizenship and became a naturalised Chinese citizen after he worked and lived in Hong Kong for nearly four decades.
The news about Nicholson’s case has so far received mixed feedback in the local banking community. Many of Nicholson’s Chinese colleagues at CICC sent him congratulations on becoming a Chinese national. Others said Nicholson’s move may be for tax reasons as Hong Kong is well known for its low individual income tax around 15 per cent maximum annually.
“I think it’s now much easier for Nicholson to visit Beijing, Shanghai and all these mainland cities where our clients and business are growing fast as he is now really one of us. We’re all Chinese,” said one of Nicholson’s colleagues who declined to be named as he was not authorised by the company to speak to the media.
George Chen is the Post's financial services editor. Like the column? Visit facebook.com/mrshangkong