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American Express, one of the world's largest payment and travel companies, is in talks with one of its Chinese partners to introduce a corporate card product into the Chinese market, a move that could make it the first foreign firm to debut the business in China.
"We are currently working with our Chinese partner, the Industrial and Commercial Bank of China (ICBC), to develop a robust corporate card product," said Pierric Beckert, senior vice-president and general manger of the company's global corporate services in Japan, Asia Pacific and Australia.
The card will be developed to meet the rising demand for business travel from companies operating in the country, and it will be quite different from the current corporate cards issued by Chinese banks that are mainly consumer cards with corporate labels.
Teaming up with ICBC, China's largest commercial lender, American Express launched its consumer card last December -its first card issuance in the Chinese market.
"The business travel market grew tremendously in China last year, and I have no reason to doubt that there will be any slowdown this year, given the robust economic growth, heavy investment and the rising number of air routes," said Charles Petruccelli, president of American Express's Global Travel Services.
Following a 25 per cent increase in 2004, the firm expects travel and entertainment expenses to continue to rise by 20-30 per cent this year in China.
The finance, insurance, real estate and business services industries spend the most on business travel expenses, almost three times more than the wholesale, retail and distribution sectors, said the company in its second survey of corporate travel management practices at the two-day China Business Travel Forum which opened in Shanghai on Wednesday.
According to Beckert, the design of the corporate cards will leverage the infrastructure already in place for the personal card and add functionality to meet corporate clients' critical needs.
By teaming up with domestic partners, the firm said it hoped its business sees strong growth in the coming years.
The company earlier announced it had signed a three-year exclusive strategic partnership agreement with TravelSky Technology Ltd, China's largest air travel electronic distribution service provider.
Under the agreement, the Hong Kong-listed TravelSky will become the exclusive global distribution system (GDS) provider for all American Express Business Travel operations in China in the next three years.
And the co-operation could even be turned into a joint venture in the future, according to Larry Liang, deputy general manager of TravelSky's GDS Business Department.
With an even eager eye on the domestic market, the US company said it could issue its own cards in the local currency, when the market is opened to foreign players.
But under current regulations, this is not allowed.
(China Daily April 16, 2005)
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