BEIJING/HONG KONG (Reuters) - China does not require foreign payment card companies to establish joint ventures with local partners to operate in the onshore market, the country’s central bank said Wednesday.
Reuters reported on Tuesday that China was pressing foreign payment card companies to form local joint ventures for onshore operations, a move that would counter a pledge on market access that Beijing made to U.S. President Donald Trump.
The push to get foreign card issuers to enter into tie-ups with Chinese companies, instead of running fully-owned units, could further delay access to the rapidly-growing market for companies like MasterCard (MA.N) and Visa (V.N).
“All Chinese and foreign firms can submit their applications to the PBOC according to legal process as long as they comply with rules,” the People’s Bank of China (PBOC) said in a faxed statement to Reuters.
“Chinese regulations require the same access conditions and procedures for Chinese firms and foreign firms,” and “do not involve any requirements on foreign firms establishing joint ventures or how much stake foreign firms have to hold.”
The central bank said that Visa and American Express (AXP.N) had submitted applications, and that it was in “close communication” with them regarding their application documentation.
“Visa and American Express have not submitted additional materials required for review and the PBOC cannot officially process their applications,” the central bank said in the statement, without elaborating.
Foreign card companies have been lobbying for more than a decade for direct access to China, which is set to become the world’s No.1 bank card market by 2020, according to GlobalData, a research company.
In 2012, the World Trade Organisation ruled that China was discriminating against foreign card companies.
In May, Beijing and Washington agreed on a deadline for China to issue guidelines for the launch of local operations by U.S. payment network operators, leading to “full and prompt market access”.
Some of the foreign card issuers, who were looking to set up wholly-owned operations in China, have “informally” been told to enter into joint ventures, Reuters reported on Tuesday, citing people briefed on the discussions with the central bank.
“The PBOC will open access to China’s payment card clearance market in a transparent, fair and equal way,” the Chinese central bank said in the statement.
Reporting by Beijing Monitoring Desk and Sumeet Chatterjee in Hong Kong; Editing by Edmund Klamann and Philip McClellan