Republic of China positioning to defeat USA with their Yuan, not ICMB’s

Yuan replaces dollar?

Yuan replaces dollar?

Lingling Wei of the Wall Street Journal has given us a clue as the future of our nation’s financial markets. Are we bowing down to Beijing by consideration of opening access to our banking system? Let’s not forget the expression of  “how to boil a live frog.”
Let’s begin by looking in our rear view mirror before getting on the freeway. In 1994 we enacted the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994.

Everyone reading this post was around at the time when this change became law. “The legislation permitted banks to establish branches nationwide by eliminating all barriers to interstate banking at the state level. Before this legislation went into effect, banks had been required to set up separate subsidiaries in each state to conduct business and it was illegal for banks to accept deposits from customers out of their home states.”

The next major event related to banking took place in 1999 when president Clinton signed the Graham-Leach- Blilely Act also known as the Financial Services Modernization Act of 1999. “Passage of this Act allowed commercial banks, investment banks, securities firms, and insurance companies to consolidate.
For example, Citicorp (a commercial bank holding company) merged with Travelers Group (an insurance company) in 1998 to form the conglomerate Citigroup, a corporation combining banking, securities and insurance services under a house of brands that included Citibank, Smith Barney, Primerica, and Travelers.”


CHICAGO—China’s biggest bank signed an agreement that would make it the first Beijing-controlled financial institution to acquire retail bank branches in the U.S., though regulators could still block the deal.

Under the deal, Industrial & Commercial Bank of China Ltd., by some measures the world’s largest bank, agreed to acquire a majority stake in Bank of East Asia Ltd.’s U.S. subsidiary. ICBC will pay $140 million for an 80% stake. Bank of East Asia, which is a publicly traded company based in Hong Kong, has a total of 13 branches in New York and California. ICBC and Bank of East Asia have talked to U.S. regulators about the deal, these people said.

China’s largest bank, Industrial & Commercial Bank of China Ltd., is the first Chinese bank to acquire a U.S. deposit-taking bank. Ken Brown explains why it could be the start of big expansions by Chinese financial institutions in the U.S.

The move represents what could be the start of big expansions by Chinese financial institutions in the U.S.

Signed in Chicago on the last day of Chinese President Hu Jintao’s state visit to the U.S., the move, comes as both Beijing and Washington are calling for greater commercial ties between the two countries.
The transaction is expected to be carefully scrutinized by U.S. regulators, including the Committee on Foreign Investment in the U.S., known as CFIUS, because of the state-controlled nature of the Chinese bank. A previous deal by a Chinese bank to acquire a bank in the U.S. was rejected by regulators. “It is going to be a long process,” a person familiar with the matter said.

If ICBC’s deal to acquire Bank of East Asia’s U.S. subsidiary goes through, Americans could walk into the retail branches, open check and savings accounts and, most significantly for many investors, open yuan accounts to trade the currency.

ICBC, as the bank is known, is based in Beijing and is 70% owned by the Chinese government.

U.S. regulators often demand that foreign banks prove they are adequately supervised in their home markets and have proper antimoney-laundering procedures in place before allowing them to set up retail operations, legal experts say.

The agreement was signed at the Hilton Chicago as part of a slew of pacts announced by roughly 60 U.S. and Chinese companies at a giant “signing ceremony” organized on Friday by China’s Commerce Ministry and its U.S. counterpart.

The deal, if approved by U.S. regulators, would allow ICBC to gain relatively quick access to American depositors. Right now, ICBC has one branch in New York, but it isn’t involved in the retail-banking business. Bank of China Ltd. is the only mainland Chinese bank that has a retail license in the U.S. market. The bank, also state owned, has two branches in New York and one in Los Angeles.
The decision by Bank of China is the latest move by China to allow the yuan, whose value is still tightly controlled by the government, to become an international currency that can be used for trade and investment.
Chinese banks have encountered uphill battles to gain access to the U.S. market in the past. For instance, it took almost two years for ICBC to get the approval from the Federal Reserve to open its New York branch, which has so far focused on commercial lending. That green light was given shortly before President George W. Bush’s trip to Beijing for the Summer Olympics in 2008.
Some Chinese banks’ bids to acquire U.S. counterparts have been rejected. A case in point is China Minsheng Banking Corp. In 2008, Minsheng, China’s first private bank and a midsize lender, agreed to take a 9.9% stake in San Francisco lender UCBH Holdings Inc., the holding company for United Commercial Bank. When the bank ran into trouble during the financial crisis over bad loans and accounting errors, Minsheng tried to buy it. U.S. regulators rejected the move because of restrictions on foreign investment in U.S. banks, according to people familiar with the matter. Regulators in late 2009 shut down United Commercial Bank and Minsheng had to write off its $130 million investment.

Gilbert closing comments. While the Peoples Republic of China buys one trillion dollars of US paper we are now on the verge of opening the front door to our individual and corporate banking. If approved by regulators,  the Peoples Republic of China could eventually control bank lending practices and interest rates where they would end up in the drivers seat. Take notice that the government owns 70% of ICBC.

Yes, while we fought a standoff with China during the Korean War this is a new war in which not a single ICBM will be launched to protect our country. It’s up to the people of America to rise up and speak out as to whether or not we are willing to permit this “boiling of the live frog” to go unchallenged.

Some church friends were not happy as I related the WS Journal story and showed them some of our ZHONGGUO RENMIN YINHANG paper currency. Should we be concerned?

The full Wall Street Journal story link is provided below:

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