Swiss banking giant UBS is deepening its partnership with Industrial and Commercial Bank of China ( ICBC ) as part of its commitment to strengthening its foothold in the Chinese market.

Speaking at the ongoing UBS Greater China Conference in Shanghai, Iqbal Khan, president of UBS Asia-Pacific and co-president of the firm’s global wealth management unit, says the partnership with the largest of China’s “big four” banks will aim to explore synergies across wealth management, asset management, and corporate banking, both domestically and in cross-border ventures.

In September 2023, UBS entered into a memorandum of understanding with ICBC to explore strategic collaborations across asset management, wealth management, investment and corporate banking, in mainland China, cross-border and overseas markets. The MOU was signed after UBS completed its acquisition of Credit Suisse in June 2023. 

“Our leadership in investment banking, combined with our wealth and asset management expertise, positions us to serve China’s growing demand for sophisticated financial solutions,” says Khan.

The Zurich-headquartered bank intends to go further with its onshore business by transitioning from its 67% holding in UBS Securities to full ownership.

He notes that UBS was the first foreign institution to become a qualified foreign institutional investor in China, the first overseas bank to invest directly in a fully licensed domestic securities firm, and the first to gain a majority stake in a securities joint venture in the country. 

Trump tariff uncertainty

Looking ahead, Khan says that UBS sees vast potential in catering to a growing class of affluent investors in China and plans to leverage its licences and platforms across its divisions to deliver integrated financial services that support the country’s next wave of growth.

On the outlook for the Chinese and wider economy in 2025, he says: “The biggest uncertainty, for China and the world, is the economic and trade policy under the Trump administration. Upside could possibly come from smaller and/or later tariff hikes, or a large-scale tariff exemption for Chinese goods.” 

On the downside, the US could raise tariffs on all or most imports from the rest of the world, which could lead to a much weaker global demand. “Tighter tech restrictions and more aggressive decoupling measures could lead to further downside risk to China’s corporate confidence, technology sector development and overall productivity growth,” Khan warns.

Despite these challenges, UBS still sees a lot of bright spots. “China is a key market for UBS. Over the past 25 years, its capital markets have seen remarkable growth, making it the world's second-largest equity market. And since 2008, the average wealth per adult in mainland China has risen by 360%, more than three times as much as in the United States,” he adds.