In a first, a state-controlled Chinese bank has signed a deal to buy a controlling interest in a U.S. financial institution.
The Industrial and Commercial Bank of China, by some measures the world's largest bank, agreed to pay about $100 million for an 80 percent stake in the American arm of the Bank of East Asia. The bank is based in Hong Kong but operates 13 branch offices in the U.S. states of California and New York.
The pact was signed Friday in Chicago at the end of Chinese President Hu Jintao's four-day state visit to the U.S. American regulatory officials still have to approve the deal, which could delay its completion until the end of this year.
The Chinese bank is 70 percent owned by China's government. If the deal is approved, it would be the first U.S. financial institution controlled by a Chinese state-owned bank. Americans would be able to make deposits at its branches, while investors would be able to open accounts to trade China's currency, the yuan.
In recent years, China has sharply increased its overseas investments in numerous industries, but has been slower to expand the reach of its financial institutions. As the new agreement was signed, China's commerce minister, Chen Deming, said one of the country's priorities was to turn its huge foreign-exchange reserves into assets in foreign countries.