From CNNMoney (link)
As China gets set to throw open its doors to foreign banks by the end of the year, there’s a gold rush among global banks to claim their stake in China’s fast-growing financial services market.
But analysts warn that banks in search of riches may find little more than fool’s gold in China, given the country’s tempestuous regulatory environment, the high cost of entry and the potential for significant loan losses due to the country’s often unstable lending environment.
In the last year, China has seen an influx of about $15 billion from foreign banks with large players such as Bank of America and Goldman Sachs investing over $3 billion each to buy small 10 percent stakes in two of the Big 4 Chinese banks. And JPMorgan Chase, which actively sought to buy a controlling stake in troubled Chinese broker Liaoning Securities before the Chinese government rejected the deal, is on the hunt for other acquisition targets in China, according to the company’s chief executive Jamie Dimon at a speech before the Detroit Economic Club earlier this week.
