The Bank of China

SUMMARY:

Since the Bank of China issued the country's first bankcard in 1985, China, followed by the United States, now has become the second-largest bankcard holder and has issued about 850 million cards. By the end of 2004, China had already issued 760 million bankcards. The industry has witnessed a rapid growth, and has made China one of the most promising markets for the global bankcard business.

Currently, foreign banks are not allowed to independently issue their own cards and are forced to issued co-branded cards with Chinese banks. Nevertheless, China's central bank has issued draft rules that would allow foreign banks and international card issuers to set up joint-venture credit-card companies with local partners and hold up to 50% of a partnership. Citigroup, American Express and HSBC are issuing co-branded dual-currency cards in China now.

MARKET TREND:

Being in 1979, the Bank of China became the agent of East Asia's credit and China started having a credit business. Although China's first bankcard was issued in 1985, the first credit card was not issued until 1995.

In only a few years, China's bankcard industry has experienced tremendous growth. Even though China took 13 years for banks to issue their first 100 million cards, it only took one year to reach the fourth 100 million (from 306 million at the beginning of 2001 to 406 million at the beginning of 2002) issued cards. By the end of 2004, 760 million bankcards have been issued. Only 35 million of the cards are credit cards. The rest are debit cards. It is estimated that 100 million credit cards will be in circulation in China's market