Some analysts suspect that Fed will delay rate increase

Section:

Note: HSBC Bank is deeply involved in the
gold market. China is going to be if it
isn't covertly already....

* * *

Britain's HSBC Buying 19.9 Percent Stake
in Major Chinese State Bank for $1.7 Billion

By Joe McDonald
Associated Press
Saturday, August 7, 2004

http://biz.yahoo.com/ap/040807/china_hsbc_1.html

BEIJING -- British bank HSBC Holdings PLC is buying
a 19.9 percent stake in one of China's biggest
state-owned banks for $1.7 billion, dramatically
expanding the foreign presence in the top ranks of
Chinese finance.

The deal, announced Friday with Shanghai-based Bank
of Communications, is the biggest move yet by a foreign
bank into China's rapidly developing banking industry.

Beijing has allowed limited foreign investment in its
banks in hopes of improving their management and
technology as it prepares to meet commitments to let
foreign banks compete on an equal footing with Chinese
institutions by 2006.

HSBC's deal with Bank of Communications could put it
ahead of rivals such as U.S.-based Citigroup Inc. and
Britain's Standard Chartered in the race for access to
China's booming consumer market.

The British bank said it would help its Chinese partner
expand its credit card business and provide other
services.

"For HSBC this investment provides the group with a
new window for developing our business in China,"
HSBC chairman Sir John Bond said at a signing
ceremony in the Great Hall of the People, the seat of
China's legislature in central Beijing.

"In return, for Bank of Communications, it's an
opportunity to draw on our international expertise and
network," Bond said.

Dozens of foreign banks have branch offices in China
or joint ventures with Chinese banks.

HSBC Holdings was the world's fifth-biggest bank in
2003 in asset terms, according to The Banker magazine.

The bank was founded in the 19th century as the Hong
Kong and Shanghai Bank in Hong Kong and Shanghai
when both were Western-ruled colonial territories.

Bank of Communications has a network of 2,700 branches
and reported $115 billion in assets at the end of 2003,
with $100 billion in customer deposits.

The bank said last month that it was considering selling
shares to Chinese investors, as well as on stock
exchanges in Hong Kong or the United States.

The HSBC stake would be just under the maximum 20
percent share that Chinese rules allow a single foreign
investor to own in a Chinese bank.

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