China: 8 Foreign Banks Seek Local Status

[HenryTo]

The mortgage and consumer finance industry in China will grow in exponential terms going forward. Today, consumer spending in China makes up approximately $900 billion of the $2.2 trillion Chinese economy. The former only equates to approximately 12% of consumer spending in the US. However, CSFB has projected this to increase to nearly $4 trillion by 2014. Going forward, look for more coverage on China and even India on this website.
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China: 8 Foreign Banks Seek Local Status
Sunday December 10, 11:28 pm ET
China Says Eight Foreign Banks Have Applied for Local Status As WTO Deadline Passes


BEIJING (AP) -- Eight foreign banks have applied to open retail operations in China, the bank regulator said as a WTO deadline for opening China's banking market passed Monday.

Some 71 foreign banks are represented in China, but until now they were barred from handling business in Chinese currency for retail customers. Beijing agreed to open the market as part of its World Trade Organization membership, and its banks have been racing to modernize in preparation for facing foreign competitors.

Banks that have applied for local status are Citigroup Inc. of the United States, Japan's Mizuho Corporate Bank, Britain's HSBC Corp. and Standard Chartered PLC, Dutch bank ABN Amro Holdings NV, Singapore's DBS Bank and Hong Kong's Bank of East Asia and Hang Seng Bank, according to Web site of the China Banking Regulatory Commission.

HSBC, Citigroup and others including Bank of America Corp. have spent billions of dollars to prepare for the market opening, buying stakes in Chinese partners and setting up credit card and other ventures.

Foreign competitors want a share of market with some $4 trillion in household savings and growing demand for financial services.

But foreign banks still must meet Chinese regulatory requirements to conduct retail business.

That, along with the cost of operating a branch network, is expected to discourage many from setting up local operations. Most are expected to continue to operate through ventures with Chinese partners.