Meet Your New Local Banker – China

The Financial Times reports China's largest bank, ICBC, announced its intentions to get into the banking business in the US.

Meet Your New Local Banker – China

The Financial Times reports China’s largest bank, ICBC, announced its intentions to get into the banking business in the US. That move actually makes sense. Politicians already started making waves about China owning a good chunk of the US through its government debt (an idiotic rhetoric, but it is a topic for a different discussion).

The Chinese are thinking instead of making loans to the US government and getting paid a barebones rate. Why not help the US consumer to get further into debt and make a juicy profit in the process? Good thinking.
The best part is that politicians will have a hard time blocking the Chinese foray into banking (though they’ll try). If the US blocks the Chinese entry into US banking, China is likely to reciprocate (I would not blame them) and thus American banks’ grandiose ambitions to drown 1.2 billion Chinese in credit card debt will be crashed.
I doubt that you’ll see ICBC branches around the corner anytime soon, but I think the acquisition of a large US bank would make a lot more sense – you get instant scale, American know-how, and you can self finance much higher yielding consumer loans from trade surplus. Call me crazy, but that is what I would do.

Please read the following important disclosure here.

Enjoyed this read?

Share it with someone who’d love it too!

New to investing?

Explore these valuable guides to get started.

Value Investing
Student
Curriculum

The 6
Commandments
of Value
Investing

Letter to
a Young
Investor

Related Articles

Current thoughts on Tesla (TSLA)

Current thoughts on Tesla

Tesla market value of $780 billion mostly reflects Elon's future dreams, not car sales. The reality? Only $100-180 billion tied to the actual vehicle business.
Europe Can’t Hide Behind America Anymore

Europe Can’t Hide Behind America Anymore

Americans have always outspent Europe on defense, but to be fair, we have a currency advantage. Our military might elevated our currency to reserve status.
Europe’s New Status: The Children’s Table (IMA Client Dinner 2025 Video)

IMA’s March 2025 Client Dinner Video

Once a year, my company, IMA, hosts a dinner for our clients. Most of them live outside of Denver—and many outside the U.S.—so this event gives us a rare and meaningful chance to meet face-to-face, often for the first time, and really get to know each other.
The Reputational Bankruptcy of the American Dollar

The Reputational Bankruptcy of the American Dollar

The US dollar will likely continue to get weaker, which is inflationary for the US. Let me start with some easily identifiable reasons.

Leave a Comment