By Gordon G. Chang, Contributor HSBC Group is expected in the next few months to sell its 8.0% stake in the Bank of Shanghai.  The financial services giant could receive as much as $800 million from its shares in the second-tier Chinese lender.  Why do analysts think HSBC will unload its holding soon?  It looks like the Bank of Shanghai is set to raise $2 billion by selling newly issued stock, on the Shanghai and Hong Kong exchanges, with a value of up to 30% of its existing shares.  The listing could occur before June, so HSBC will have to act now if it does not want to be trapped by a lock-up period, typically imposed on existing shareholders for periods of up to a year. Two years ago, nobody thought HSBC would ever dispose of major Chinese assets.  Now, there is talk it might get rid of all of them.  Analysts sense a change in sentiment because HSBC is already dumping Chinese assets.  This year it completed the sale of its 15.6% interest in Ping An to Thai conglomerate Charoen Pokphand Group for $9.4 billion.  Previously, the shares in China’s second-largest life insurance company had been described as “strategic.”  Then, there are rumors that the institution, once known as the Hongkong and Shanghai Bank, will also sell its half interest in HSBC Life Insurance, which laid off 130 sales staff recently. The investment community is even talking about a once-unthinkable event, the disposal of HSBC’s 18.7% holding in .  John Bond, when he headed HSBC, wanted to increase the stake in Bocom, as China’s fifth-largest lender is known, and eventually control it.  Today, however, HSBC looks like it will never achieve management control. The dominant view is that HSBC will be content to continue holding its Bocom stake because, as one unnamed Shanghai analyst told the South China Morning Post, a sale would mean “HSBC’s China story will be over.”   That analyst may think it is inconceivable that any major bank would ever exit China, but the country is no longer that important to the world’s financial community. In fact, it looks as if HSBC will have to work hard to find another bank to take its Bank of Shanghai shares.  The fact that it could not find a financial institution to buy its Ping An stake is a sign that, in general, foreign bankers are “divorcing” China, as South China Morning Post columnist Doug Young recently put it. The reason for the unhappiness is clear.  HSBC, for instance, sold Ping An because it was unable to get “strategic returns” from the insurance company. HSBC is not the only institution to feel this way.  Analysts think sold the bulk of its remaining holding in 2011 and Goldman Sachs unloaded another tranche of shares in the Industrial and Commercial Bank of China this January because, like HSBC, they were frustrated that their large stakes weren’t helping them further their China businesses.  Chinese banks simply do not believe that they need enduring relations with foreign counterparts,

From: http://www.forbes.com/sites/gordonchang/2013/04/21/global-banks-are-divorcing-china/