U.S. banking giant Citigroup has applied to the China Securities and Regulatory Commission for a license to sell securities and will apply in the next few months for a license to operate a futures market, The Wall Street Journal reported.
The company also plans to hire about 100 people over the next two years to staff these services, according to the WSJ.
Last year, Citigroup became the first U.S. bank to be awarded a domestic fund custody license on the mainland, which allows it to offer asset management services.
The new custody business will begin operations this month, the WSJ said.
In October, Citigroup and China Guangfa Bank unveiled a partnership, called Wealth Management Connect, that enables cross-border wealth management services.
The partnership followed Citigroup’s move earlier this year to end consumer banking operations across much of Asia and focus on services to wealthy individuals.
The company has maintained consumer banking services in Hong Kong and Singapore.
After China and the U.S. signed their 2020 trade agreement, U.S. banks were permitted to own and control businesses in the country of 1.4 billion people.
Goldman Sachs and JP Morgan Chase already have bought out their Chinese partners in their securities businesses; Credit Suisse, Morgan Stanley, and UBS have taken a majority ownership of theirs, despite frosty relations between Beijing and Washington.
“There are going to be challenges in that relationship and that could have an impact on certain activities that we would or would not be involved in in China,” Goldman CEO David Solomon said last week at the Financial Times Global Banking Summit.
“But, broadly speaking,” he added, “with a 10- or 20-year view, our business in China will grow.”
TREND FORECAST: As we have long forecast, China’s human rights issues, imperial ambitions, and plans to replace the U.S. as the world’s premiere economy come second to the bottom line: the business of business is business, the business of China is business, and U.S. financial institutions see their future in the East.
We repeat the warning we stated in “HSBC Going Asian” (8 Jun 2021): As China’s economy grows, the West will become increasingly dependent on it for manufactured goods as well as profits from selling services there, such as wealth management.
As this dependence grows, and as China’s economic might strengthens, the nation will grow increasingly bold in asserting its authoritarian rule both internally and in foreign affairs, such as its claims to the South China Sea and demands that Taiwan surrender to the mainland.