China opens to foreign banks
A Chinese investor walks past a stock price board.
TEXT OF STORY
Scott Jagow: China just started allowing foreign banks to come in and do joint ventures with Chinese companies. China has put limits on the investments those banks can make. The banks don't like that, but that isn't stopping them from making deals. Jill Barshay reports.
Jill Barshay: Credit Suisse said it's teaming up with a Chinese brokerage. Its global competitors aren't far behind. JP Morgan, HSBC and Citigroup are in negotiations.
Jeremie Waterman: With the moratorium lifted, you're now seeing increased activity by American firms that were previously shut out of the market.
Jeremie Waterman is a China specialist at the U.S. Chamber of Commerce. He says the banks are attracted by China's stock market. It tripled its initial public offerings last year to $60 billion.
Waterman says the new rules say a foreign bank can't own more than a third of a Chinese joint venture.
Waterman: What these rules still do not allow is for trading. That's really an important piece of the business that foreign securities firms would like to be able to engage in.
One other change: These new firms now have carte blanche to underwrite Chinese stocks and bonds. That's one way, at least, they'll able to make some money on the deal.
In New York, I'm Jill Barshay for Marketplace.