Running Head: Citigroup in Post-Wto China Analysis

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  • Published : March 11, 2006
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Running head: Citigroup in Post-WTO China Analysis

Citigroup in Post-WTO China Analysis
Strategy Formulation and Implementation
MGT 578
February 25, 2006

Citigroup in Post-WTO China Analysis
Introduction
Citibank, part of Citigroup, was one of the first foreign banks that entered China over a century ago (1902) and hence has a long history of goodwill in the country. Before China's entry into the World Trade Organization there were significant limitations on the scope of foreign businesses. As a result, Citibank was only permitted to participate in limited corporate banking services and in limited Chinese cities. Since China's membership into the World Trade Organization, many of these limitations have slowly begun to diminish; nevertheless Citibank and other foreign banks must manage within the existing regulations. Argument #1: Citigroup has NOT displayed adaptability to expand China operations Some of Citigroup's business actions could seem to show their lack of adaptability to expand their operations within China. Initially they failed to take part in joint ventures to facilitate their entry into China and even still hesitate to partake in significant number of joint ventures choosing instead to try to grow through acquisitions. As a result of the significant number of regulations that foreign-banks faced, this would create a slower entry rate for Citigroup. Initially Citigroup was unable to introduce credit card services due to restrictions on foreign players and limited access in personal banking. While restrictions still stave off foreign players and local banks are reluctant due to credit risks, the answer to adaptation into the multibillion dollar credit card industry appears to be joint ventures between foreign banks and local branch banks (Von Emlod, Pitsilis & Wong, 2003). Citibank's attitude toward joint ventures was: "We recognize that most JVs do not last very long; JVs give an institution a short-term...
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