Welcoming the world: The optimism surrounding China's entry into the World Trade Organization belies the hard work ahead for foreign and home banks alike. (China).

Banker, The, May, 2002 by Do Rosario, Louise

China joined the World Trade Organization (WTO) in mid-December -- and foreign banks have already reaped the benefit. In March this year, Citibank and the Hong Kong & Shanghai Banking Corporation (HSBC) became the first two foreign banks to be allowed to do foreign currency business with Chinese customers. At the end of last December, HSBC paid US$62.6m for an 8% share of the Bank of Shanghai; it is negotiating to buy a similar minority share of the Beijing City Commercial Bank.

These stories made headlines in the Chinese media, with television reporters explaining breathlessly how HSBC clients in Hong Kong can buy and sell stocks and foreign exchange over the telephone through the bank and praising its smiling and efficient tellers.

But they tell a...

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