BEIJING — Bank of America’s decision to buy a major stake in China’s largest mortgage lender, is a major shot in the arm for China’s creaky and debt-laden financial system .
The $2.5 billion deal, in which Bank of America will own 9 percent in the state-run China Construction Bank (CCB), is the single largest foreign investment in a Chinese company. Bank of America has the rights to boost ownership to 19.9 percent in the near future.
The deal between Bank of America, the United States’ third-largest bank, and CCB, marks the first major foreign investment in one of China’s "big four" state-run banks.
It also gives CCB access to foreign expertise months before China’s banking sector must open to foreign competition under international trade commitments.
