China's decision to allow Citigroup Inc. to issue credit cards in its own name may signal a step toward the government in Beijing opening its banking industry. New York-based Citigroup is the second foreign bank, and the first Western one, to be permitted to issue credit cards in China, said Bloomberg.

The announcement today came as the World Trade Organization, acting on a U.S. complaint, probes the legality China's refusal to let foreign companies issue their own bank cards denominated in its currency or to permit companies such as Visa Inc., American Express Co., MasterCard Inc., Discover Financial Services and First Data Corp. to process card transactions in China.

"It's perhaps not a coincidence that this is coming at this point when this case is going on," said Fredrik Erixon, director of the Brussels-based European Centre for International Political Economy. "But I think it's more connected to changes on the ground in China, in its policy on competition in banking in China, where we see a cautiously gradual opening."

Bank of East Asia Ltd., Hong Kong's third-largest lender, was the first non-mainland issuer of credit cards. More banks will probably follow, Erixon said.

Source:chinesestock