The Federal Reserve will allow three of China’s Big Four banks to expand operations in the US and additionally approved two Chinese state-owned investment funds to conduct non-banking financial activity, China Daily reported. Industrial and Commercial Bank of China (601398.SH, 1398.HKG) received approval for its purchase of up to 80% of Bank of East Asia’s (0023.HKG) US subsidiary. Bank of China (601988.SH, 3988.HKG) will be allowed to establish a branch in Chicago, and Agricultural Bank of China (601288.SH, 1288.HKG) will be allowed to set up in New York. The Fed also approved China Investment Corporation (CIC), Central Huijin Investment and ICBC to become bank holding companies with powers to conduct non-banking activities including asset management, lending and real estate appraisal. The Fed’s actions were a response to China’s decision last week to allow foreign banks to buy larger stakes in the mainland, said Guo Tianyong of the Central University of Finance and Economics.