http://www.kenniffonline.com/hsbc-2008-profits/
Foreign Banks in China Post profit despite the limitations of the Industry
Despite China's restrictions on its banking and financial industry, banks foreigners reported robust profits of his business comes from the continent, provide relief to U.S. markets problems.
For HSBC Holdings PLC, China mainland fourth most profitable market last year at U.S. $ 353 million in earnings before taxes increased 137 percent with a predominance of local currency trades, bonds and derivatives of large corporate customers.
Profits from China is good for Citigroup Inc., as its net income for 2008 in the country increased by 95 percent by value of U.S. $ 191 million, driven by an increase of 20 percent in commercial transactions in foreign currency. This is the stark compared with overall net loss of U.S. Citibank $ 27,680,000,000 last year.
Earnings stressed the importance of developing markets like China in the global banking sector.
In spite of the restrictions conservative in their financial markets, Beijing has opened to give the foreign banks and fund managers opportunities to pursue business in China. JP Morgan Chase & Co. is doing well in China by managing 25 percent of dollar transfers from China to the United States.
"Having a managed currency does not mean that there are opportunities to make money," says Lisa Robins, director of treasury services at JP Morgan China in Beijing, told WSJ. "Our China business is growing and profitable. "
The restrictions on direct investment in China securities market have not hampered business for foreign companies money management. Last year, foreign players in the industry scored 32 joint ventures, which control about half of the U.S. local industry fund investment of 290 billion U.S. dollars in assets. According to Shanghai market research firm Z-Ben Advisors, these activities led to the average management expenses U.S. $ 52,000,000 each.
Foreign companies are also finding ways to enter China's futures trading commodities in China working with local staff. "These are large volumes of trade," said a banking analyst at Wall Street Journal.
In any case, the slowdown global economy and the growing importance of Chinese market has revived plans to make Shanghai an international financial center and shipping. In recent weeks, the government announced local reforms, merged trade economic zones, offering new products and reduced taxes for foreign investors.
The government wants to attract more local foreign banks and brokers in an effort to turn Shanghai into a financial center to rival Hong Kong, London and New York. Today Financial services account for only 7 percent of gross domestic product of Shanghai.
About the Author
Dezan Shira & Associates is a professional services firm which helps foreign firms establish their business in China, Vietnam or India.
Dezan Shira often contributes to the China Business News magazine, China-Briefing.com.
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