Competing as a financial services company in China, like many other industries, presents both significant risks and opportunities.

Opportunities include the fact a small – but significant in absolute terms – proportion of the population has and continues to amass wealth.

Meanwhile risks include the significant consumer and market information gaps, regulatory hurdles and cultural misconceptions.

These two opposing forces invariably sit side-by-side.

A combined opportunity and risk, for instance, is that it is estimated there are some 300,000 US$ millionaires residing in China, however nobody fully knows how accurate this figure is or how best to target this group.

Citigroup, as an example, set up an office a few years ago in Shanghai’s budding Asia financial hub, the Lujiazui Finance & Trade Zone in Pudong (the stage for Tom Cruise’s 2006 Mission Impossible III movie)

However its pre-launch marketing had suggested there would be a bounty of potential high-end Shanghai clients for it to target once up and running, yet post-launch the group struggled to get anywhere near it’s targets.

This was partly due to the fact many of Shanghai’s wealthy elite are Taiwanese businessmen who keep their assets offshore and the fact its message to the market wasn’t unique enough and was spread to thin.

A mitigating factor perhaps is that the city is home to almost 17 million people.

Nonetheless the failure to make any significant headway into the market off its own bat forced Citigroup to focus more on its non-controlling 20 per cent stake in Shanghai Pudong Development Bank, which was also failing to set the world on fire.

This led Citigroup to fork out US$3.1 billion in taking a controlling stake in the Guangdong Development Bank.

By teaming up with a consortium of Chinese state-owned companies and IBM it was able to effectively turn its 20% stake in Guangdong, a midsize lender ripe for significant restructuring, into a controlling 85.6%.