Study On The Location Choice And Strategy Of Foreign Banks In China

On December 11th, 2006, Regulations of People's Republic of China on Administration of Foreign-funded Banks was officially complemented, which means that foreign-founded banks enter China in full scale, acquiring the same national treatment as China-funded banks. There is no doubt that the entering of foreign-funded banks is a big issue of our country's finance industry. No matter it is good or bad, they will play a more and more important role in our country's financial system.This paper will study the strategy selection of foreign-funded banks' investing China in the angle of position location. Actually, from the middle to the west, the footsteps foreign-funded banks expand and the markets they penetrate are not equilibrium. The strategy and location of different foreign-funded banks are different. Historical experiences show that foreign-funded banks with different nationalities have different comparative advantages. As a result, there exist some relevant differences in their location in a certain region. Therefore, it is of instruction significance to study the position location and strategy selection of foreign-funded banks in order to distinguish the strategy development of foreign-funded banks with different nationalities and formulate the corresponding measures against their competitions. Meanwhile, it is of great help to strengthen financial supervising and managing to them so as to make them better serve our country's economic construction and finally promote the reform and mature of our country's finance industry.This paper firstly introduces foreign investment theory, position location theory and the basic theory of transnational banks' investing overseas, which provides theoretical basis for motive analysis of foreign-funded banks' entering China. And then the paper briefly summarizes the background of foreign-funded banks' investing China and introduces China's macro economy background as well as the process of the opening of China's banking to foreign capital. Based on the theories above, this paper uses Granger Causality Test to analyze the motives of foreign-funded banks' investing China, and then starting from different origin foreign-funded banks, the paper studies their developing process in China, the present situation and their locations, and testify the influence factors by constructing Multiple Linear Regression Model of different origin foreign-funded banks. Different location factors directly determine their managing and developing strategy in China. For instance, Hong Kong-funded banks adopt the developing strategy of taking Shenzhen as bridgehead and Pearl River Delta as main battlefield to expand all over China; the centers of Europe and USA funded banks have transferred from Pearl River Delta to Yangtze River Delta. Finally, this paper processes SWOT analysis of foreign-funded banks and analyzes their target market location in China, and discusses the different business expanding strategies they adopt in East China and West China, their agglomeration in developed cities and their developing innovative financial products actively, and meanwhile their expanding to capital cities in West China and developing characteristic product services.