Multinational Banks In China

This thesis looked at the development of the Chinese banking system and explicitly foreign banks in China. In order to understand the roles played by foreign banks in China, and to allow for suggestions to be made as to the future opportunities and challenges faced by domestic and international banks in China, International banking theory, motive, strategy, and development are assessed.Foreign banks have pursued differing China entry and growth strategies according to size, competitive advantage, prevailing market circumstances, and long-term goals. Larger banks have tended to be more aggressive and have sought to expand their operations as quickly as regulation will allow, where as smaller banks have focused more on consolidation. A persistent pattern seen sector wide, has been the tendency for banks to see servicing foreign business and branch foundation in major cities as the keys to success.The case study on Citibank reinforced the findings for banking sector as whole but also highlighted how Citibank has adapted its strategy to include offering credit cards, forming partnerships with domestic banks, and looking into product innovation in order to attract domestic clients. In terms of future opportunities, foreign banks should be looking to attract domestic customers. The relaxation of regulations allows banks to access all areas of China, to offer products such as credit cards, and offer domestic lending services. The main challenges for foreign banks concern competing with the domestic branch networks and difficulties in implementing governance and management structures. For domestic banks, international banks provide opportunities to learn processes and skills required to compete in a global market, but are also beginning to challenge domestic bank dominance.Overall the thesis has shown that there has been a progressive development in the Chinese banking system, and this has allowed international banks to become a prominent feature in China. The future offers opportunities for domestic and foreign banks, and should lead to the creation of a highly developed banking sector in Mainland China.