Citigroup Shifts Base For Growth To China
Citigroup will aggressively expand its services in China
in consumer, retail, corporate and investment banking,
according to Charles Prince, the group's chief executive.
He made the announcement at the launch of a dual-currency
credit card with the Pudong Development Bank in Shanghai.Citigroup
is not yet allowed to issue credit cards in China, but
will be allowed to do so in December 2006.
Lately Citigroup has been especially aggressive
at wooing business in China, with Robert Rubin, chairman
of the company's executive committee, visiting China.
Rubin was formerly US treasury secretary, and has become
an outspoken critic of the Bush administration's debt
spending policies.
Citigroup's plans show that the company plans to shift
its base of growth from the US to China. While the US
has by far the largest economy, it will no longer be the
engine of economic growth. With growth hampered by heavy
debt financing, a falling dollar and heavy job loss, the
engine of world economic growth will shift to China.
In contrast, China is going through a rapid growth phase,
driven by urbanization, service job growth and encumbered
by an antiquated state-owned financial sector. Citigroup
hopes to offer financial services and products to these
new Chinese professionals.
Knowing that Citigroup is the only banking group which
can challenge China's current state-owned banks all across
the board with a wide range of services and products,
China's premier Wen Jiabao has moved to aggressively
restructure the banks which have any hope of making
the transition from state-owned companies to listed public
companies.
Only by doing so will the Chinese banks stand any chance
of surviving in the post-2006 China market.
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