International Operation Research Of Chinese Commercial Bank

The internationalization of banks is both the premise for banks to compete in the global arena, and the ultimate result of global competition of banks. Banking reform and development today inevitably requires banks to operate globally. Economic globalization connects separated individual markets, which are liberalized further under the same trend of economic globalization. Financial globalization, being the center of economic globalization, changed dramatically under the trend of financial globalization, accelerating the pace of banking industry development throughout the world.China's entry into WTO is meaningful in that it symbolizes the integration of China's banking system into the international one. In facing up with the severe competition of foreign banks, the Chinese banks should seek active development rather than sit and wait passively for foreign banks to occupy the domestic market. The Stategy abroad raising by The 16 Party Congress and the Eleventh Five-year Plan, and the implementation requirement for the improvement of the level of opening-up encourage Chinese banks to participate in international competition and cooperation at a higher level and in a broader spectrum. Hence, the study on the internationalization of banks of this thesis is meaningful, which has both theoretical implication and empirical economic significance when being applied into practical uses.Basically speaking, the internationalization of banks has two aspects of meanings: one is for domestic banks to expand overseas, and another one is to open up domestic banks for foreign competition. The thesis is to study the overseas expansion of Chinese banks. At the moment, the big four state-holding commercial banks should take correspondent major responsibility for the internationalization of Chinese banks. The study of internationalization of commercial banks in this thesis thus also focuses on the study of these four state-holding commercial banks. The thesis addressed and answered the following questions: (1) what are the theoretical explanation for the internationalization of banks, and being a micro economic unit, what are the diving forces for banks to internationalize themselves; (2) whether there are certain rules to follow as far as internationalization of banks is concerned, and what are the experiences and lessons we can draw from the process of internationalization of some internationally competitive banks; (3) how competitive are the Chinese commercial banks and what are the real degree of internationalization of these banks? What are their advantages and disadvantages; (4) which kind of measures should be taken to improve the internationalization of commercial banks considering the constraining factors of Chinese banks?Specifically, the thesis is arranged in the following sequence:Firstly, the thesis defines its subject of study as the four state-holding commercial banks, and the content of the thesis as concentrating on the overseas operation and development of the four commercial banks. The thesis also briefly summarizes the overseas operation of these banks in the first section, which has a practical significanceSecondly, the thesis gives a theoretical analysis of the motivation and causes for the international operation of banks by applying multinational company theory. The thesis also uses the tool of the cost-benefit analysis to build up a micro-economic analysis model, by which the conclusion that the motivation for international operation of banks lies in the comparative benefits they enjoy. Besides, the thesis also gives a detailed description of the background for the internationalization of banks.Thirdly, By summarizing experiences from other countries, the thesis comes to its own conclusion concerning the experiences the Chinese banks can learn from, which is, the internationalization of banks should proceed on a gradual basis, and should be supported by government policies and complimented by proper financial reforms.Fourthly, The thesis reviews the internationalization process of China's commercial banks, thoroughly analyzes the advantages and disadvantages of internationalization operation of China's commercial banks. Then it assesses the degree of internationalization of China's big four commercial banks, through analyzing the big 4's proportion of abroad institutions in total assets and their business and sequence in the world's big 1000 banks. After those, by referring to research achievements on banks'international competitiveness theory and assessment criteria, the thesis constructs its own assessment system of international competitiveness which fits China's reality, and analyzes the international competitiveness of Chinese commercial banks and other big commercial banks in the world.Fifthly, Based on the real development status of China's commercial banks and the procedure and objective of banks'internationalization operation, the thesis advances a policy of gradual spread of objective markets, the coordination and cooperation between home and host operations, and the promotion stratagem of localized operation.Sixthly, banks'globalization can use multiple organizing structures, and cross-border merger and acquisition (M&A) has been becoming the main model for modern banks to develop intensively in order to improve competitiveness. Based on the analysis of the two main overseas expansion methods, green land investment and cross-border M&A, the thesis illuminates the macro background and micro driving forces for banks'cross-border M&A. Through researching the real status of Chinese commercial banks'cross-border M&A, the thesis summarizes and advances the conditions and strategy.Seventhly, Through analyzing the causes and contents of international regulation, the thesis studies the impact of Basel II implementation on Chinese banks'international development, pointing out the main flaws of international supervision to Chinese commercial banks, and pointing out corresponding measures in responding to it.The main innovations of the thesis include:First, by studying the experiences and causes of internationalization of major banks in major countries, the thesis concludes that internationalization of banks should be supported by enhanced government policy support, and it suggests three ways for the government to build up a platform for banks to go abroad.Second, by absorbing the beneficial elements of competitiveness theory and its evaluation methodology, the thesis establishes an indicator system, taking into consideration of the constraint reality of China, for the evaluation of the competitiveness of Chinese commercial banks, and uses the system to analyses Chinese commercial banks qualitatively and quantitatively.Third, As an effective measure for the internationalization of Chinese banks, the thesis raises the innovative observation that the Chinese banking institutions both in and outside of China should coordinate and cooperate with each other, and based on this, the thesis creatively suggests some measures for the issue of coordinated operation and cooperative innovation.Forth, As far as local operation is concerned, the thesis argues that the establishment and development of overseas institutions should follow the principle of products-basis, and it recommends overseas business and operations of Chinese banks be re-organized.Fifth, built on the thorough analysis of historical experiences of merger and acquisition of international banks, the thesis points out that cross-border M&A of Chinese banks should adopt a three-stage strategy, which has a practical significance.Last but not the least, in dealing with the new supervisory arrangement of Basel II implementation, the thesis analyzes both the challenges and opportunities that Basel II implementation brings about for the Chinese commercial banks in their internationalization process.