Citibank gets OK to launch credit cards in China
February 12, 2012
By: Megg Mueller
Citibank has announced it will launch a credit card in China in 2012, the first of its kind in the historically restrictive country. According to CNNMoney, Citibank is not only the first American bank but the first non-Asian bank to win such approval by the Chinese banking authorities.
The China Banking Regulatory Commission will let Citibank create a credit card business in its country which will involve both commercial and retail credit cards, according to a press release issued by Citibank. Citi has had a banking presence in China since 2003 when it began a partnership with Shanghai Pudong Development Bank (SPDB), but the American company only acted in a technical and personnel support role while the co-branded credit cards were issued by SPDB. Citi said it will retain its partnership with SPDB, but a Pudong spokeswoman told Bloomberg Businessweek the credit cards will no longer have the Citibank logo on them.
The growing Chinese credit card market has been a target for Citibank since its partnership with SPDB, but the country has forbidden foreign companies to enter the banking market there. The World Trade Organization is looking into complaints about the restrictions imposed on foreign companies, such as what Bloomberg describes as "China's refusal to let foreign companies issue their own bank cards denominated in its currency, or to permit companies such as Visa Inc., American Express Co., MasterCard Inc., Discover Financial Services … to process card transactions in China." Analysts agree the decision to allow Citibank into the country's banking market is unlikely a coincidence, but also herald it as a sign the market is slowly opening to foreign interests.
Citibank has 16 million credit card customers in Asia, according to CNNMoney.