Analysis On Chinese Commercial Banks' Foreign Direct Investment

Viewing the statistic edited by the United Nations Conference on Trade and Development, the inward foreign direct investment flows in service sector have reached 459,400 million dollars, accounting for 63.3 per cent of inward FDI flows in 2001, and the inward FDI flows in finance sector have reached 140,300 million dollars which accounts for 19.3 per cent of inward FDI flows. Multinational banks play important roles in the process of foreign direct investment while they are the major carriers of cross-border finance activities.But there is no special international production theory on banks' foreign direct investment, and it is also in the preliminary stage in how to apply international production theories to services. So, this article analyzes how to apply general international production theories to services' foreign direct investment and activities of multinational enterprises involvement in the service sector, and expounds what should be modified in the process of application.This article has three major parts. In the part one, I analyze the academic bases of commercial banks' FDI. The content includes how to apply international production theories to service sector, the mainstream of international production theories and the characters of theories in service sector.There are analyses of Chinese commercial banks' ownership advantages, location advantages and internalization advantages in the process of FDI under Dunning's eclectic paradigm in part two.In the part three, I give forth some ways in how to strength our commercial banks' three advantages mentioned above.The possible innovation of this article is analyzing China's commercial banks' multinationalization from the view of international production, not limited by the theory of capital flows. And this article expounds Chinese commercial banks' ownership advantages, location advantages and internalization advantages in the process of foreign direct investment.