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China Monopolizing Yuan-Denominated Payment Cards

in International Business

China Monopolizing Yuan-Denominated Payment Cards

The World Trade Organization (WTO) has ruled that China has broken one of WTO rules by discriminating against foreign card companies and maintaining a monopoly on yuan-denominated payment cards.

China UnionPay is allowed to process domestic currency transactions, limiting foreign providers such as Visa and Mastercard.

The ruling is a victory for the US government, since the Obama administration had first lodged such a complaint in 2010. Moreover, the trade gap with China has become a campaign issue in the upcoming elections. “Today’s win highlights that tackling unfair Chinese trade practices has been a priority of this president,” said Jay Carney, White House press secretary.

Visa said in a statement that the company is “hopeful that this ruling will pave the way for international payment companies to participate in the domestic payments marketplace in China”.



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