All investments in Chinese banks by foreign companies must be approved by shareholders and by government regulators. Currently, neither RBS's nor Temasek's investments have been approved by government regulators. Indeed, Temasek - the Singaporean state investment agency - has yet to see its proposal make it past shareholders.
Recently, there has been heightened sensitivity in China about foreign investment in Chinese banks, and, according to reports in the Chinese press, it has been suggested that Temasek's investment has been opposed because of fears over a foreign state agency's growing involvement in the local banking sector.
Chinese banks have been open to western investment as long as the investment brings with it western knowledge. In this case RBS is being brought in to improve Bank of China's (BOC) retail, corporate and credit card business.
The deal between RBS and BOC has also faced criticism at home with RBS's shareholders lambasting the move as a passive involvement in a risky state-owned bank. This forced RBS to seek guarantees about its investment from the BOC, which further added to the unease within China about the deal.
While RBS's investment looks likely to be completed, the Temasek deal looks less secure, despite BOC's president telling the Financial Times that the Singaporean investment agency has a reputation for "�reforming and renewing banks that have been slightly problem-ridden."
Certainly, China's quest to join the World Trade Organization means that it has no option but to open up its commercial markets to greater competition and foreign investment. However the onus is arguably only the foreign players eyeing the Chinese market to be disciplined in their investment strategies: a desire to enter the country purely because it is the largest untapped consumer market on earth will not guarantee success.
As RBS has arguably shown, alliances and joint ventures need to be targeted to generate more specific, short-term benefits that can be easily communicated both to Chinese stakeholders and to investors back home.