Reporting by Hong Kong Newsroom; Editing by Sumeet Chatterjee and Rachna Uppal. HONG KONG, July 18 (Reuters)
Tensions between the United States and China are rising again, drawing attention to international diplomatic relations following Well Fargo’s decision to suspend travel to China. This decision stemmed from concerns about the safety of foreign executives on China, particularly following the case of Chenyue Mao, whose departure from the Asian country was blocked. These moves could directly impact banking operations and economic exchanges between the two countries. Learn more.
Wells Fargo restricts China operations
Wells Fargo WFC.N has suspended all travel to China after a banker was blocked from leaving the country, a source said, bringing the U.S. bank’s operations in the world’s second-largest economy into focus. The employee, Chenyue Mao, who was born in Shanghai and based in Atlanta, currently serves as a managing director at the U.S. commercial bank, specialising in international factoring business. Below are the publicly available details about Wells Fargo’s business interest in China and Asia Pacific:
CHINA BANKING UNITS: Wells Fargo’s China presence is much smaller than its Wall Street peers. The bank first set up a representative office in Beijing in 1997, which was de-registered in 2018, business registration records show. In 2005, the bank established a branch in Shanghai and, in 2015, another one in Beijing.
These two branches draw deposits from Chinese customers, and provide loans, trade bonds and securities other than stocks, and conduct foreign exchange businesses, according to the units’ business registration. Unlike other large U.S. banks, Wells Fargo has not moved to establish a locally incorporated foreign-funded bank – a status that allowed foreign lenders to offer a wider range of banking businesses.
Trade ties are under increasing strain
Mao’s forced stay in Chinese territory was seen as a form of control and investigation, and, according to international organizations, this practice has become frequent in China, especially for people with ties to Western companies. According to the American Chamber of Commerce, this poses significant risk to local businesses, as it forces companies to reevaluate their physical presence in the country.
FACTORING BUSINESS: Mao, a trade financing executive at Wells Fargo, has been with the bank for 12 years, according to her LinkedIn profile. She was elected chairwoman at FCI two weeks ago, a global organisation for factoring and financing for domestic and international trade. Mao spearheads Wells Fargo’s international factoring business, a financing method where companies sell their receivables to third parties, such as banks, in exchange for immediate cash, and advises multinational clients on cross-border working-capital strategies, according to an FCI release.
WELLS FARGO IN ASIA PACIFIC: The bank has two main Asia Pacific hubs in Hong Kong and Singapore, according to its website. Other regional offices including Seoul, Taipei, and Tokyo, in addition to in-country relationship management teams outside of these cities. Its Hong Kong branch, which supports the bank’s customers in Asia, recorded HK$42 million ($5.35 million) in profit after tax in 2024, down 22% from the previous year, financial disclosures in April showed.
The decline in profits at the Hong Kong unit may reflect this instability in the Asian market. Although Wells Fargo has a robust strategy, Mao’s case has created uncertainty not only for employees, but also for customers and investors. This case could impact the entire international financial sector.
A climate of distrust sets in, negotiations are paused
The corporate world has been shaken by the Chenyue case, and tensions between the US and China are growing. Wells Fargo, with the US support, is pressuring the Asian country for transparency and legal certainty, and we can expect defensive measures that can impact investments in China, distancing ties between the two economic powers.