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.

Related Articles

The Impact of Higher Interest Rates on the Economy - AI Edition

The Impact of Higher Interest Rates on the Economy – AI Edition

I asked AI to educate and entertain my readers with a radio show-style dialogue based on my essay - The Impact of Higher Interest Rates on the Economy.
Navigating Market Cycles From Bulls to Nvidia – AI Edition

Navigating Market Cycles: From Bulls to Nvidia – AI Edition

I asked AI to transform my essays into a radio show-style conversation. In this episode, topic is stock market math, sideways markets, the role of P/E in market cycles, impact of interest rates on P/E, economic analysis, Magnificent Seven stocks, NVIDIA, and a lot more.
Managing a Million What Would I Do Differently

Managing a Million: What Would I Do Differently?

Warren Buffett has stated multiple times that if he could manage a very small amount of money today, he would be able to return more than 50% per year to shareholders. If you managed a million dollars of only your own money, would you do it differently? 
Choosing an Investment Manager Beyond Warren and Charlie

Choosing an Investment Manager: Beyond Warren and Charlie

If you were obliged to invest all your investable assets with one person and you couldn’t choose Warren or Charlie, whom would you pick?

Leave a Comment