US delays licenses for China banks

The US has delayed approving banking licenses to China’s two biggest banks over concerns about the role played by China’s sovereign wealth fund in the lenders’ largest shareholder, the Financial Times reported. Industrial and Commercial Bank of China has been lobbying to set up branch operations in the US for over a year, while China Construction Bank submitted its application in February. Bankers and officials from China and the US told the paper that the US Federal Reserve was delaying approval because the banks’ largest shareholder, Central Huijin Investment Company, is controlled by the sovereign wealth fund China Investment Corp. Chinese officials said they see the Fed’s move as part of the US negotiating strategy for the bilateral Strategic Economic Dialogue set to begin on Tuesday in Maryland.