Citigroup

Citibank was the first U.S. bank to establish operations in China when it opened a branch in Shanghai in 1902. From the early 1940s until 1984, Citibank was absent from China, but since 1984 it had gradually reestablished an active presence. In 1997, Citibank had reached a crossroads. It had to decide how best to participate in the rapid growth of the Chinese economy and the huge inflow of foreign direct investment. Citibank had many competitive advantages on the basis of which it had established a unique strategy that excluded joint ventures. In 1997, a wide variety of new potential services included credit cards, RMB (Chinese currency) banking, and various fee-based services. Government regulations still severely restricted types of loans foreign banks could make, but it was expected that these regulations might soon be liberalized (Harvard Business Online, 2005).

Reference:

Harvard Business Online (2005). http://harvardbusinessonline.hbsp.harvard.edu/b02/en/common/item_detail.jhtml?id=97G016. Retrieved January 6, 2005.

China's entry into the World Trade Organization at the end of 2001 brought promises that foreign financial institution would be permitted to operate through China. In 1998, Citicorp and Travelers Group, Inc. merged to create the new Citigroup, Inc. Travelers brought a vast array of financial services that added to Citibank's existing portfolio of consumer and commercial lending. Travelers had developed a very extensive business in investment banking, asset management, life insurance, property casualty insurance, as well as consumer lending. Citigroup now had to determine the business prospects for each of its activities in the growing China market. Fears of social and economic dislocation might lead China to impose regulatory restrictions, limiting the pace of foreign expansion. Economic growth might be impeded by the existing