Transnational Operations Of China's Commercial Banks

The integration of world economy has been an irresistible trend, whichshows the rapid development of trade and foreign direct investment, the quickflow of resources and the enhancement of cooperation between countries. Toenhance the economic cooperation, especially the cooperation betweencountries in the same area, has been the logic choice, which will improve theinternational competition of one country with the advantages of the whole area.Under this background each country and enterprise has to think about how tograsp the opportunities and gain the advantages. And now they realize that itis the best way to improve the international competition with the participationof the integration of world economy and utilization of the most comparableadvantages.The integration of the world economy and finance make the internationalbanking industry possible to enlarge the scope of business and realizeeconomies of scale. And they also have to face the change of market shareand the diminishing of monopolistic advantage. During the last ten years,more merges and acquisitions have appeared which the important way tooperate transnationally for banks is. Through merges and acquisitions bankscan realize the scale economy, adjust the internal division and take thecomparable advantage of its competitors to become the leader of the industry.Facing this request and the trend of internationalization of foreigncommercial banks, we are considering their effects on our commercial banks'operation. What pressures are on our commercial banks? What issues weneed to address? Whether we have a favorable environment forinternationalization? How to internationalize our commercial banks? All theseare what this paper is about to address.There are four chapters in this paper. The first chapter will introduce thetransnational operation of Chinese commercial banks. The second chapter willanalyze the issue by using western economies theory. To internationalize isdesigned to maximize profit. This analysis is followed by discussion ofdifferent hypotheses for internationalization of banks in the world, will discussthe advantages and disadvantages of these hypotheses. In the third chapter,the author is going to point out the indispensability and meaning ofinternationalization of Chinese commercial banks. Will see to the trend in theworld economy, the challenges posed after entering the WTO, the furtherdevelopment of commercial banks and verify the need to internationalize. Inchapter four, will analyze the trend of economy globalization, the basis ofdevelopment of macro-economy of China, the entry of WTO of China, theexperiences of Chinese commercial banks gained in the Reform and OpenDoor, thus to prove that the domestic environment and internationalenvironment are favorable for internationalization of Chinese commercialbanks. At the same time, the author will focus on the problems and impedesChinese commercial banks are facing when internationalizing. In chapter 4,after analyzing the conditions of branches of commercial banks, thedevelopment of intermediary business of commercial banks, thecomprehensive services and training of talents of the commercial banks, willpropose the methods for the internationalization of Chinese commercialbanks.