Citigroup Inc Chairman Sanford Weill said in March he'd like to see 300 Citibank branches in China someday. At the rate China has let his company expand, Weill's wish won't be realized until the year 2302.
A year after joining the WTO, China is balking at boosting foreign investors' access to its 1.3 billion consumers.
While local sales have risen at Citigroup, General Motors Corp and other companies from overseas, regulations aimed at protecting domestic companies are curbing their next phase of expansion: selling a wider range of goods and services in more Chinese cities to compete with local rivals.
"There are a lot of expectations that have been there for over 20 years, and things really have not moved," said Ernst Behrens, chairman of the EU Chamber of Commerce in Beijing and head of Siemens AG's China business, referring to the opening of the banking, insurance and telecommunications markets.
"It's a very serious concern."
The delays mean China is reaping more benefits from WTO membership than its trading partners.
China's rapidly expanding economy, Asia's second-largest, grew 7.9 percent in the first three quarters of 2002, the fastest of any large world economy.
The US trade deficit with China, bigger than with any other country, widened to US$73.6 billion in the year to September from US$61.2 billion a year earlier as China's exports to the US rose 19 percent.
That helped push the total US trade deficit to a record in August. The 15 countries of the European Union had a 20 billion euro (US$20 billion) deficit with China through August.
A growing deficit forces an economy to rely more on foreign investment to plug the gap, risking a drop in currency and equity values if global money managers withdraw.
Overseas investors aren't fully sharing in China's growth.
Citigroup's Citibank has just four China branches and HSBC Holdings Plc, the country's biggest foreign bank, has nine -- compared with 28,000 for Industrial & Commercial Bank of China, the largest domestic lender. To install an automatic teller machine machine in a shopping mall, a foreign lender needs central bank approval.
Regulators limited international lenders' access to the Chinese currency last month, making it harder for them to add local customers.
"We would like to see them move a bit more quickly on raising domestic loan limits," said Jeffrey Shafer, vice chairman of Citigroup's Salomon Smith Barney Inc.
General Motors and other foreign carmakers also face obstacles to expansion: They're barred from offering auto financing, which would help them attract more buyers in a country where only one in 100 people owns a car.
``It is clear that some areas of implementation have gone more smoothly than others, and it's equally clear that in some areas implementation is difficult,'' said Charlene Barshefsky, the former US Trade Representative who led US-China negotiations on the country's WTO entry.
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