Citi, Visa still matter to China, and vice versa
C•China approved Citigroup to establish a wholly owned securities company and Visa to begin preparations for a domestic bank card clearing institution. The approvals come as Beijing seeks pragmatic cooperation with Washington.
1. China approves new operations
China approved Citigroup to establish a wholly owned securities company and Visa to begin preparations for a domestic bank card clearing institution. The approvals came weeks after Xi Jinping's state visit to the United States; Citigroup CEO Jane Fraser and Visa CEO Ryan McInerney had joined a US delegation to China in May.
2. Different opportunities in China
Visa’s opportunity lies less in displacing payment apps, which represent nearly 90% of China’s retail spending, than in helping money move across borders. UnionPay handles about 95% of the country’s card spending and has partnered with Visa on international remittances and tourism payments. Citigroup is re-entering onshore investment banking as foreign firms’ fortunes improve: foreign investors held 4.66 trillion yuan of Chinese equities by the end of June, up 26% from December.
