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SCOTT JAGOW: The big U.S. banks are dying to get a piece of the action in China. The Chinese don't want foreign banks diving right in. But today, Morgan Stanley put its toe in the water. Jocelyn Ford explains.

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JOCELYN FORD: Morgan Stanley is the first U.S. investment bank to get a commercial banking license in China. It leaves behind competitors like Goldman Sachs and Merrill Lynch. Morgan Stanley got the license by acquiring a Chinese bank, albeit a tiny one.

The Nan Tung Bank in southern China has a single branch, with fewer than 40 employees. Fraser Howie is an author on China's financial industry. He says Beijing may want foreigners to start small.

FRASER HOWIE: "They won't let you in on the big deals in the big cities. And so they seem to let you in on the tiny deals. It's not entirely clear that this is really a step to greater things.

Howie says it's easier to control a single branch than to turn around a large bank with a lot of bad loans and old-fashioned management.

But it'll be a challenge to compete with China's four major government-controlled banks. They own a total of 70,000 branches.

In Beijing, I'm Jocelyn Ford for Marketplace.