Management Tactics Of The Overseas Subsidiaries Of China State-owned Commercial Banks

Since the start of the Reform, the big four state-owned commercial banks of China gradually expanded overseas with Bank of China a step ahead. After the inception of the globalization of world economy and finance in 1990's, the Big Four accelerated their overseas expansion, with Bank of China and Industrial & Commercial Bank of China leading the way ever-increasingly in numbers of entities abroad and geographical coverage resulting in worldwide networks covering major economies. Nevertheless, while the parent banks are committed to physical expansions of overseas presence, each individual entity should focus on surviving and developing in the overseas marketplace. Thus scrutinizing the elements impacting the operation of each overseas entity and the related strategy is conducive to the understanding of theories of multinational banking and providing feasible tactical suggestions on the overseas development of the Big Four.Up to now, the researches conducted in China on multinational banking focus mainly on the incentives of overseas expansion, geographical positioning, the choice of set-up and the overall globalization strategies of the parent banks rather than the management of the overseas entities themselves. This paper gains some in-sights of overseas entities by case study and tactics analysis. In doing comparison study of different cases, the comparison of entities from developed countries and developing countries lead to the conclusion that the experiences of banks from developed countries are not of guidance to the cross-border operation of China state-owned banks at present stage. It is then followed by case studies of some representative operations from developing countries but located at international financial centers. By scrutinizing their backgrounds, C-A-P complex tactics and evolution of performance ratios, the status of overseas operations of China state-owned banks among international peers is highlighted and the summary of their operational tactics which could guide China state-owned banks come out. Further more, also analyzed are major aspects of operational tactics of China state-owned banks, such as marketing, synergy, risk control, etc. Several issues are pointed out. At the end of this paper, by summarization, it comes to some suggestions of tactics.