China said on Thursday that the recent government approval allowing American bank card payment giant Visa to operate in the country was the “direct outcome” of Chinese President Xi Jinping’s state visit to the United States last month.
“The Visa card was granted permission to establish a banking card clearing institution,” said Qiu Wenxing, the Deputy Chief of Mission at the Chinese embassy in Washington.
“It is a direct outcome of the presidential summit.”
Visa received administrative approval on Tuesday from the People’s Bank of China (PBOC) to make preparations for a locally registered bank card clearing organisation, a move the central bank described as a major step in opening up the country’s financial sector.
The US card payment company will have one year to complete its advance arrangements, after which it may apply to begin operations, the central bank said in an online statement.
Visa has established a foreign-invested company, Visa Information Technology (Beijing), in China to operate there.
American Express began domestic bank card clearing operations through a Chinese joint venture in 2020, while Mastercard’s joint venture received approval in 2023.
Unlike its competitors, Visa plans to operate through a wholly foreign-owned enterprise.
Visa initially applied for the PBOC approval in July 2017. A central bank official told Chinese media in 2019 that the company withdrew its application in January 2018, resubmitted revised materials three months later and was awaiting a decision.
Visa CEO Ryan McInerney said in a statement on Tuesday that the approval marked “a significant step forward in Visa’s long-standing commitment to China”.
“We greatly appreciate the important role of the leaders of the United States and China in pursuing a constructive and strategically stable relationship between the world’s largest economies,” he said.
“For more than 40 years, Visa has been an active contributor to China’s dynamic payments landscape.
“We look forward to taking the necessary steps in the process, pursuant to the PBOC’s regulations, to begin operating domestically in China.”
McInerney was among the high-profile guests at last month’s White House state dinner in honour of the Chinese leader and also joined the delegation of CEOs who accompanied US President Donald Trump on his state visit to Beijing in May.
In its press statement, Visa said that “China is one of the world’s most advanced and dynamic digital payments markets”, supported by a “highly innovative ecosystem and continued commitment to further financial sector liberalisation”.
“Visa looks forward to bringing its world-class innovation, security and reliability to Chinese consumers and businesses, contributing to the continued development of China’s domestic payments landscape,” it added.
The Chinese embassy on Thursday said the financial services agreement was part of the 10-point consensus reached at last month’s summit, alongside other outcomes including the launch of the Board of Trade and a two-month extension of the Busan agreement.
“The two sides reached a consensus on the principle of financial services,” the embassy said.
It added that China welcomes financial institutions from all countries, including the US, to expand their business and establish operations in the country.
“China hopes the US will also provide a fair, transparent and stable environment for Chinese financial institutions,” it noted. -- SOUTH CHINA MORNING POST
