Million-dollar jobs, travel perks and racy parties vanish as China’s research pullback sends chills through banks and brokers

Brokerage analysts in China are confronting a harsh new reality.

The industry – which employs thousands of people who research and opine about stocks, the economy and markets – is retrenching after years of expansion.

At Guotai Junan Securities, a state-owned brokerage based in Shanghai, several senior analysts recently resigned after deciding not to accept pay cuts and stricter performance metrics. One Shenzhen-based brokerage laid off 40 per cent of its analysts during the first quarter and slashed their 2023 bonuses by more than 50 per cent. Other brokerages are reducing meal and travel budgets to contain costs.

The cutbacks, described by people familiar with the matter, come as a prolonged market slump reduces trading commissions and authorities tighten limits around what research analysts are allowed to publish. It’s a stark turnaround from a few years ago, when securities firms were hiring aggressively and offering compensation of 10 million yuan (US$1.4 million) or more to star analysts.

“Now with the trading fees cut, the bubble in the research circle will also burst,” said Sun Jianbo, a former chief strategist at China Galaxy Securities who now runs China Vision Capital, an asset manager in Beijing.