Beijing: Global bank HSBC said on 10 August it had received the official go-ahead to open a wholly-owned banking subsidiary in rural China, making it the first foreign bank to tap into the nation’s countryside.
“We (plan to) combine our experience from the overseas market and knowledge about China to make the bank profitable and sustainable,” said Dan Dan Chang, HSBC’s spokesperson in Shanghai.
The HSBC Rural Bank will be based in Cengdu County in central China’s Hubei province, said HSBC. The operation, expected to be established by the end of the year with up to 25 staff, will cover an area of 6,900 square kilometres (2,760 square miles) with a total population of two million people, the statement said.
“We support China’s policy on priority to develop its rural economy and intend to play a full part in these ambitions,” Stephen Green, HSBC’s group chairman, said. However, analysts argued that the rural operation should be seen within the context of HSBC’s overall strategy for expansion in China.
“The rural bank showcases HSBC’s goodwill to the Chinese government and could benefit the approval process of branches it intends to set up in the developed coastal area,” said May Yan, a Hong Kong-based analyst with the ratings agency Moody’s.