Daiwa, Mizuho Clear China Operating Reviews After Daiwa's 706 Million Yuan Deal
Key Facts
Daiwa and Mizuho have cleared the final regulatory reviews to begin securities operations in mainland China, Reuters reported, citing Bloomberg, in a step addressing operating requirements following earlier establishment and ownership arrangements. Reuters said the two groups had "successfully cleared the final reviews to conduct these businesses on the mainland." Their progress comes as Citigroup is still awaiting approval for an application submitted in late 2021, according to the agency. For Daiwa, the step followed an agreement to buy its partners' stakes in its existing Chinese venture. Mizuho had already received approval to establish its company, under a regulatory process that separates the creation of an entity from permission to conduct business.
Daiwa agreed in April 2026 to take full ownership of its Chinese joint venture in a deal valued at 706 million yuan, equivalent to $103.36 million, according to Reuters. The group held a 51% stake in the venture before the agreement, meaning it was already the majority shareholder before buying out its partners. The purchase covered the two Chinese partners' stakes of 16% and 33% in the joint venture. The partners had put the stakes up for auction in February, ahead of the acquisition agreement Daiwa announced in April. The venture thus moved to full ownership by the Japanese group through the purchase of stakes in an existing company, after its Chinese business had operated in partnership with local shareholders.
In Mizuho's case, the China Securities Regulatory Commission's decision approving the establishment of its company in China is dated September 30, 2025. The approval included a condition for the post-establishment stage, barring the company from conducting business under its Chinese name before obtaining a license to conduct securities and futures business. The decision stated that "Mizuho Securities in China may not conduct business under this name before obtaining a license to conduct securities and futures business." Under this condition, permission to operate depended on obtaining a business license in addition to approval to establish the company. The final reviews that Reuters reported had been cleared follow the earlier establishment decision and its operating condition.
The business scope approved by the commission for Mizuho includes securities underwriting, one of the activities authorized for the Chinese company under the establishment decision. The scope also includes proprietary trading and securities asset management. However, the approval limits asset management to asset securitization, according to the regulatory text specifying the company's activities. In earlier coverage of Mizuho's strategy, the Shanghai government said the group aimed to cooperate in manufacturing and technological innovation. It added that the group's areas of focus for cooperation also included healthcare and green energy as part of its plans for operating in the Chinese market.
The regulatory framework allowing full foreign ownership of securities companies dates to a Chinese decision that took effect on April 1, 2020. The China Securities Regulatory Commission announced the removal of the cap on foreign investors' stakes in these companies from that date. The commission said in its announcement that it would implement "the removal of the foreign ownership cap on securities companies effective April 1, 2020." The regulatory change allowed foreign investors to establish wholly owned securities companies in China. The two Japanese groups' paths fall within this framework, whether through Daiwa's full acquisition of its joint venture or approval to establish Mizuho's company and the subsequent reviews to begin operations.
On the Chinese economy, gross domestic product grew 4.5% year-on-year in the third quarter of 2026, according to Reuters. That pace exceeded expectations for growth of 4.4% for the same period. Growth also accelerated from the 4.3% recorded in the second quarter, putting the third-quarter reading above both expectations and the pace of the previous period. In October 2026, China kept its one-year loan prime rate at 3.00%, according to the agency. It also held the five-year loan prime rate at 3.50%, as part of its decision to leave benchmark lending rates unchanged.