It may not seem like much that a Chinese bank not well-known in America is buying into a medium-sized US bank. But it is of interest because it has never happened before and perhaps is the beginning of a wave

According to the FT, "China Minsheng Bank is set to become the first mainland institution to invest in a US bank after striking a deal to acquire 9.9 per cent of San Francisco-based UCBH Holdings (NASDAQ:UCBH) for over $200 million." The paper speculates that there will be many more of these deals to come. The Chinese banks are flush with cash, and the big US market is attractive. The paper adds that Beijing-based Minsheng has never been state-owned. It was founded by a group of investors in 1996, and was the first private Chinese bank to list on the Shanghai stock exchange.

The deal would appear to be mundane because of its size, but it opens the question of whether Chinese banking companies can buy into any US bank. If so, how much can they own? Is a bank strategic to US interests the way that a defense contractor would be? Should the US government have any role in approving banking deals?

The answers goes to the heart of whether US markets are truly free markets, or can the US government determine that on a case-by-case basis.

Probably no one will care about the UCBH deal, but what if a Chinese bank wants 5% of Citigroup (NYSE:C).

Saudi interests already own a piece of Citi, so why shouldn't the Chinese?

Douglas A. McIntyre is a partner at 24/7 Wall St.