Chinese regulations require foreign banks to be free of major regulatory fines for three years before establishing onshore operations. However, Citigroup received $136 million in fines in July and was ordered to address domestic data management problems.
Despite these challenges, Chinese regulators reportedly continue to support Citigroup's expansion. The bank maintains its commitment to the Chinese market, with Citi China's president, Lu Xuan, emphasizing the importance of China in Citigroup's global network.
This situation reflects the broader interest of foreign financial institutions in China's market as the country continues its financial sector opening-up. Since 2020, when China lifted foreign ownership limits on securities and fund management firms, several U.S. banks, including JPMorgan and Goldman Sachs, have established fully owned securities firms in China.
Experts note that China's ongoing market liberalization presents significant opportunities for foreign businesses. The Chinese government has recently introduced measures to further open up the services sector, including improvements to cross-border trade mechanisms.
Concurrently, China and the U.S. have established a bilateral Financial Working Group to address mutual financial concerns. In August, officials from both countries met in Shanghai and signed an agreement to enhance cooperation on financial stability.
This development occurs against the backdrop of China's continued economic opening-up, contrasting with increasing U.S. restrictions on business cooperation with China, particularly in high-tech industries.
