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American Express tackles the Chinese market

Miguel A. Rodriguez
Miguel A. Rodriguez
14 September 2020
American Express to be the first institution to get the payment license for China

Last week we talked about President Trump's decision and the US Senate considering the delisting of the Chinese companies on the US stock exchanges. 

In an announcement made yesterday, China opened up the $45 trillion financial market to foreign investors. The move was possible because the country's central bank licensed American Express to conduct transactions. It is the first license of such kind given to any foreign institution. Experts see this as a countermove to the American actions.   

American Express's entrance in the Chinese market is a partnership between it and Lianlian DigiTech Co to clear yuan transactions on a market that is supposed to worth $27 trillion. 

Even though American Express is the first one who got the payment clearance license, it is not the first American financial institution. At the beginning of the year, MasterCard got the green-light to set up bank card clearing services in China. In May, Fitch Ratings got approval from the People's Bank of China to rate the domestic bond market.

From analysts’ point of view, the opening of the Chinese markets represents a part of the deal signed in January between the two countries. Also, it shows the confidence that China has in globalization and openness toward foreign companies. 

After the announcement, American Express stock price lost more than 2.50% during regular trading hours, but it recovered and even exceeded the loss by gaining 3.12% after-hours. 

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This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided. 

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Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.