A Research On The FDI Of Financial Service Industry

Since 21^st century, economic globalization has been increasingly deepened which has further contributed to the closer economic relationship and dependency of every country all over the world. Also, the rapid development of world trade and foreign direct investment (FDI) has achieved the optimal allocation in the world. Specially, a striking feature is that financial services industry has begun to perform a more crucial role in the development of global economy, becoming a key industry during the globalization progress. Worthy to notice, banking is generally recognized as the most important body of whole financial services industry and its FDI growth has been experiencing a booming expansion. The banks in many countries especially those from western countries have taken strong and efficient strategies to expand and achieve their going abroad goals. Through expanding narrow market space and diversifying the banking business, the banks doing their best to pursue transnational strategies would be able to develop their comparative advantages, improve their international competitiveness and finally gain the extra benefits at the maximum.After entering into WTO, China's economy has directly met the challenge coming from the tough competition of the global market and at same time has shared the great benefits by virtue of further participating the world economic and financial activities and affairs. The close integration into the global economic system has provided more and more opportunities for our banking industry to pursue sustainable development. Under the circumstance of the fact that China has become a WTO member, our banking sector is supposed to fully make use of legal right conferred by WTO and actively promote the progress of going abroad strategies, which would become an effective way to face up to the challenge of globalization and which would of a significant for the future prospect of our banking industry.An analysis on the motives and reasons why our banking is going abroad will become a central focus in this essay. This essay will be divided into six chapters to discuss step by step. First, Chapter One will propose the general framework. Chapter Two will pay attention to present the theoretical framework about the reason why our banks have been willing to make international strategies. The Eclectic Theory of International Production presented by Dunning will be employed as a fundamental theory to explain the motives of our banks'going abroad. Furthermore, on the basis of that, this essay will add some meaning macro economic elements to this analyzing framework in order to create a more comprehensive and stronger explanation power as a brand new theory framework for the following research. Chapter Three will discuss the current development situation about the overseas investment of our banking as well as the specific patterns and ways how to invest in overseas market. Chapter Four will focus on revealing a series of macro elements which have put a meaningful influence on the outward foreign investment behavior of our banking. In Chapter Five, this essay will deeply penetrate the main competitive advantages (Ownership Advantages, Internalization Advantages and Location Advantages) leading to our bankings'overseas expansion from the micro side. The finally chapter will look back on the historical lessons such as crisis the banks of Japan and the United States had experienced. According to analyze the historical and current our banks'situation by comparative method, it is not difficult to find that there is evidence to predict that our banking would be on the risk. Thus, the essay is going to take any advice for our banking to avoid the predictable risks.Based on the analysis of the reasons why our banks have been making internationalization strategy recently, this essay will conclude that both internal and external macro economic elements and the improvement of our banks'core competitiveness are pushing our banking to invest overseas. International strategy will be beneficial for domestic banks to produce economic transferring effect in foreign and domestic market which will be a locomotive for domestic banks to improve the profitability power and international competitiveness.