Perhaps Citibank should not hold its breath waiting for the Chinese government to approve its bid for a reported 40% to 45% stake in Guangdong Development Bank. The mainland government had been talking about lifting the 25% foreign stake limit in Chinese banks, and Citibank had been hoping for a decision before the Chinese New Year in February. Now, China Daily reports, the government is not likely to decide the issue anytime soon.
“The case of Guangdong Development Bank has been looked into many times by the China Banking Regulatory Commission and other related administrations,” the paper reported, “and it is hard to break present restrictions on foreign strategic investor issues.” Chinese regulators have been pressing for relaxing the restrictions on foreign investments, but domestic leaders have been pushing back, saying the government should continue to hold controlling stakes in state-run banks.