American Express Partners With ICBC To Issue
China Credit Card
American Express will partner with Industrial and Commercial
Bank of China to market and issue dual-currency credit
cards (US dollars and RMB) to China's growing population
of urban and rural professionals.
This move by American
Express follows closely on the heels of Citigroup
to issue dual currency credit cards in China with its
China partner, Pudong Development Bank. Industrial and
Commercial Bank of China is one of the major four state-owned
banks in China.
While Chinese spending has shown rapid growth in the
past year, the Chinese government has recently worked
aggressively to rein back credit and spending because
of the fear that too much spending will lead to inflation.
The Chinese government has increased capital
requirements for banks since the second half of 2003.
China is now awash in money, and much of it is speculative
money that has flowed into the country using unofficial
channels, which makes it very difficult for the government
to control.
In 2003, for the first time, capital inflows to China
were more than capital outflows.
Like China's other state-owned banks, Industrial
and Commercial Bank of China is moving to cut back
its bad loans to state-owned enterprises, and is now moving
to expand into new areas of business. Consumer lending
is considered to be more reliable, and along with Construction
Bank of China , ICBC has been particularly active
in the home mortgage market. Home ownership in China is
now over 60%.
The largest single impediment to credit card issuance
is a nation-wide credit reporting system. Now, individual
banks have their own systems which are not shared.
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