Wal-Mart, GE launch Chinese credit card

BEIJING Wal-Mart Stores Inc. and General Electric Co.'s finance arm are joining the race for a share of China's growing consumer credit market by launching their own credit card this week, a Wal-Mart spokesman said Tuesday.

The card is to be formally launched on Friday but the companies began taking applications on Monday, said Jonathan Dong, a spokesman for Wal-Mart China. Wal-Mart's partners are GE Money and China's Shenzhen Development Bank Ltd.

The card will be part of the Visa network and can charge purchases in China's currency, the yuan, or a foreign currency such as the U.S. dollar, Dong said.

"It can be used throughout the country as well as overseas," Dong said.

Chinese and foreign banks and credit card companies are expanding in China in hopes of tapping its growing consumer market as Beijing eases restrictions on their operations.

Chinese banks that have taken on foreign banks as strategic investors have cited their expertise in issuing credit cards as a key reason for seeking them out as partners.

Wal-Mart's new credit card is the second issued by the Bentonville, Arkansas-based company in China in as many months.

In September, the company issued a card with British-owned HSBC Corp. and China's Bank of Communications Ltd., according to Dong. That card is part of the Mastercard network.

The cards, which bear the Wal-Mart logo, are both a marketing tool for the company and a service to customers, Dong said.

"It gives us a great branding advantage. The card I carry has the Wal-Mart logo on it. People are surprised to see it," he said by phone from the company's China headquarters in the southern city of Shenzhen.

Wal-Mart has been expanding rapidly in China, where it opened its first outlet in 1996. The company now has 66 stores with 36,000 employees and news reports say it is bidding to buy a Taiwanese-owned chain of hypermarkets in a US$1 billion (€700 million) deal.

The credit card with GE will be issued in southern China, while the card with HSBC was issued in the north, Dong said.

The strategy reflects the limitations of China's developing banking and credit industries, where most companies lack a nationwide service network.