The Entry Of Foreign Banks In China Analysis Of Motivation, Strategy And Its Influence On China's Banking Industry

With constant deepening of the reform in banking system and gradual relaxation of the business and areas limited to foreign banks, more and more foreign banks enter China and launch business. Until the end of 2004, 67 foreign banks from 19 countries and regions have set up 211 organizations in China that can manage business, among which 111 have already got the permission to manage RMB business. And the total assets of foreign banks have reached USD 68,955 million, accounting for 1.8%of the total assets of the whole banking financial institutions.Under the trend that more and more foreign banks come to China, we have to wonder what their motives to come here, what their strategies and what they can bring to our banking industry? On the basis of the theory of banks carrying on transnational activities both at home and abroad, to some extent this paper attempts to find answers to those questions and expects to further analyze and summarize the status quo of foreign banks'development in China.Starting from the analysis of the entry motive of foreign banks, we can draw a conclusion that the motive of foreign banks coming to China is mainly to share the economic growth profit at present stage. Driven by this motive, foreign banks will definitely cover financial fields as extensive as they can and compete with Chinese banks in many aspects such as business and clients. So they will put much more pressure on Chinese banks comparing with what driven by"following clients"motive. Under the status that there is still a distance in the competitiveness between Chinese banks and foreign banks, and that relying on abundant transnational experience, foreign banks have made suitable strategies to develop in China for themselves, at last, this paper discusses the influence that foreign banks will bring to our banking industry from the point of efficiency and stability.Using the related theory of economics and finance, this paper analyzes the entry motives of foreign banks, their strategies and the influence they can bring to our banking industry. Combining the theory of...