Citibank is known for its innovative approach in developing markets. Citibank has always been at the forefront of exploring opportunities in markets where level playing field was absent. This calculated-risk approach has been the reason for development of efficient banking at Citibank. On sensing the vast potential of Chinese market, Citibank became the first foreign bank to set-up operations in the country which later was known as Asian Tiger.
Thus the Bank developed its recognition in China not only with the foreign companies but also with government itself. Regarding the professionalism for example, the managers of the PBOC implemented the Citibank audit procedures to the institution so that China could have a top of the art process of audit for its financial institution. The collaboration with the Chinese authorities should even go further since the bank with its long term policy is becoming a key player in the Chinese banking system.
[...] The specific importance of guanxi in China is another argument in favor of this agreement since a joint venture can help acquiring these connections. On the other hand a joint venture can help making a positive impression on the POBC since it shows that the company wants to build relationships within the country and that it is here to last and to implement in the long- term. A joint venture can also help providing staff from local population more easily. [...]
[...] Does the experience of Citibank can be useful for implementing any other activities of Citigroup in China? The future privatization of the SOEs will create a huge pool of opportunities for many foreign financial services. A fully developed network like the one Citibank is currently creating therefore would be useful for the all activities of the group. An opportunity would be in the insurance market. Indeed, the Chinese government tries to catch up with the international standards (process, marketing ) to create Chinese leaders in this field. [...]
[...] It can also create a future for credit cards and e-banking[5], thanks to the new markets and the new way of doing business that the privatization will generate. Moreover the company can receive benefits and supports from other divisions already operating in the country. These strategic directions take into account the economic and cultural variables, but the company must consider that making business means also consider the political environment: what is the best way to implement the company processes, improve its position and work in a safe environment at the same time? [...]
[...] Another reason for the possible future company's success is the fact that Chinese companies can learn a lot from Citigroup, copying its way of doing business and trying to achieve specific skills that nobody else have, so they will not strive for eliminate a company that can give them such an innovation. Some critics say that to achieve complete success in china and compete more effectively within the market the Communist party should be advocated to an end. Maybe this will be impossible in the short term and, even if it could be useful, we don't think it will be necessary. [...]
[...] Knowing the way business works and how people think at it, is very important and Citigroup put a big effort on trying to understand China's practices and the way people from their act when doing business. This is the reason why we strongly believe that they can have success, but only if they continue to commit some jobs to locals and train their best managers on-site. This will make their business healthier and more efficient. The question, anyway, is unfortunately not answered yet. [...]
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