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Don't know which one is most active, but GS and MS have established their foundation in China for quite some time. Other banks like BoA and Citi are also rushing to China nowadays.

US bank-wise, MS and GS are indeed the early goers. Eruopean bank-wise CS has some presence there. But I think right now the biz is only concentrated on investment banking like IPO or M&A but not trading, i.e. there is little to trade in China right now. people believe eventually derivatives will become popular there, but question is when.

How do you feel about trading China FX?

RBS & HSBC both have stakes in the big four Chinese banks.

deutsche is quite active as well.

QuoteOriginally posted by: TraderJoeRBS & HSBC both have stakes in the big four Chinese banks.The dance partner sheet right now looks likeBank of America <-> Construction BankRBS <-> Bank of ChinaGS/Allianz/Amex <-> ICBCAgricultural Bank is still a messHSBC is partnering with the Bank of Communications which isn't a "big four" bank. It's number five.Citibank is partnering with Shanghai Pudong Development BankNewbridge Capital controls Shezhen Development Bank. Not a big deal, but an interesting one to watch as an experiment.JP Morgan-Chase and Deutsche Bank seem to be interested in going in on their own. MS has partnered with CCIC.GS has had this weird arrangement which gives it a controlled subsidary.Most of the quant work is in the field of risk management. There is very little work in the derivatives side because the securities sector is basically walled off from the commercial banking sector.

QuoteOriginally posted by: CBHow do you feel about trading China FX?The currency is not fully convertible, and you can't legally trade on the capital account. You can only trade for import/export purposes.There are some currency options and deriviatives, but no one has anything close to a pricing model for them.

Also keep in mind that Chinese commercial banks and securities companies are separated from each other. I did a mini-legal research project to figure out if one US bank can invest in both commerical banks and securities companies. The short answer is yes. The long answer is several pages and on my website.I haven't updated that page to take into account the changes that the new Securities Law put in, but since most the Chinese restrictions are in the Commercial Bank Law, this shouldn't change much.Also structually, PRC law is very object-oriented like C++, whereas US law resembles much more like Common Lisp. In general, the basic concepts of PRC law come from German law, namely the importance of the "juristic act" as sort of an atom on which things like contracts can be created. However, the Securities Law is very much influenced by US law.

I know of one that is looking to build a team(20+) of Quants in Shanghai to support a new business it is launching globally.