Beijing has a really great proposal.  They will allow international investors to buy bigger shares in their banks if we allow their banks to operate in the U.S.  

"Bilateral co-operation is very important if we want to broaden our market entry policies and open the door much wider," [Liu Mingkang, chairman of the China Banking Regulatory Commission] said. "Bilateral co-operation is essential and will be very helpful." 

Let's see... "bilateral cooperation" sure sounds warm and fuzzy.  The proposal is that some investors get a bit more ownership in Chinese banks.  And their fully owned Chinese banks get full licenses to operate in the U.S.  That sure does not look like an even trade, but typical for our international agreements.

The U.S. Trade Representatives will probably recommend doing this.  The USTR typically bargains hard to get a little access to foreign markets, in return for flinging the doors wide open to foreign access here.  But slap a "trade agreement" name on the deal, and the radical "free traders" will drop everything they are doing to push the deal.  I do note that the Federal Reserve has the juridiction here, not the USTR.

China banking services may be as trustworthy as their seafood.  The US Dept of Agriculture's Foreign Ag Service (FAS) operates an export credit assistance program.  It provides export credit guarantees for transactions.  FAS rates countries according to risk categories based upon the program's past history and experience with financial institutions in those countries. 

FAS rates China as a "6" which is the riskiest category - on par with Mozambique.  So let's let them sell us home mortgages.

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