Taking Sides Citigroup

Citigroup Adaptability Paper

May 29, 2006

Citigroup Adaptability Paper

Citigroup has had an extensive history with China and the decision made within Citigroup’s corporate office to expand its services signifies an important economic role. China is one of many Asian countries that have a higher competitive economic growth potential. Citigroup’s entrance into post-WTO China, however, raises questions about the company’s ability to use adaptability while trying to grow its operations in China.

Arguments for Success

Citigroup has been able to demonstrate its adaptability in its attempts to expand its operations in China through its ability to access capital, cash flow, and have qualified staff. Also, Citigroup has been able to acclimate to the Chinese government regulations.

Citigroup continues to display adaptability in its attempt to expand operations in China through outsourcing, increase technological advances, the internet, the market growth, and in efforts to increase its number of consumers and investors. Citigroup also offers foreign currency in the financial market to the local corporate companies and to its foreign investors.

As indicated by Citigroup’s ability to adapt its services to meet the needs of consumers in China, the company has an advantage of pushing services such as automobile loans, home loans, and credit cards, so that consumers in China can also reap the benefits.

The biggest problem that Citigroup will have is their ability to work with a government that is very intent on ruling its people and basically making every decision for their people. However, as new international industry starts to come into China, the Chinese government also needs to learn how to adapt to the way these international companies conduct business.

While it is important for countries to feel that they are always in charge, it is the type of government that China represents that will be the biggest barrier for any international company to get involved. Where Citigroup has a strong advantage is the fact that it has done a lot of work with the PBOC in setting up different financial activities such as auditing and accounting. Since the premier bank in China has been used to keep an eye on new banks entering China, they have found themselves keeping an eye on the very people that have trained them, Citigroup.

While we believe that Citigroup can successfully integrate into a very large and prosperous business in China, there are still hurdles that they have to go over.