Red Dawn! Chinese state banks to enter US market
Friday, May 11, 2012 at 12:04AM You just want to summon your inner Yakov Smirnov:
In America, banks loan you money.
In China, you loan banks money!
WSj front-page lead on "Chinese banks get nod in U.S." The Fed Reserve okayed 3 state-run banks to enter and apparently didn't stop the first ever acquisition of a U.S. retail bank by one of them.
The goal of Chinese banks? Initially, to service Chinese companies operating overseas and those foreign investors looking for "exposure" to the renminbi.
Exposure is the key word here - in both directions. But, in general, I heartily approve.
China is the biggest saver in the system these past couple decades. So yeah, access is crucial for an economy with shakey finances.
Of course, China's financial system has its own dangers, but - again - in general I greatly approve of even more financial interdependence.
It'll help keep the China crazies inside the Pentagon on a leash.
Reader Comments (3)
Not only the USA allows 3 Chinese banks to enter the US financial market, vice versa China will allow foreign financial capital to engage more in China.The 18th Party Congress will decide that foreign banks can get more shares in the Chinese market and a liberalization of the Chinese banking system.The World Bank issued a report demanding more economic reforms in China. It looks like that the Chinese goverment ist taking this report serious.However, I´m not that enthusastic about economic deregulation and liberalization in China as it breeds the fertile ground for a Chinese financial crisis which would have also severe impact on the world economy--especially if interdeopence between the leading world economies is growing.
"However, I´m not that enthusastic about economic deregulation and liberalization in China" Can it really be called deregulation? It would seem to me that the affect of entering a western culture would be regulation, or perhaps more accurately re-regulation. Not sure how liberal western banks can be classified as.
Interesting analysis as to the effects of a depreciating renminbi.
http://www.fx-mm.com/14983/trading-commentaries/daily-forex-brief-fxpro/more-rmb-depreciation-cannot-be-ruled-out/