China's Icbc International Development Strategy

This thesis analyzes the resources and capabilities of Industrial and Commercial Bank of China (ICBC) to compete in the global financial market, reviews its internationalization development evolution in the past years, summarizes the characteristics of current status of ICBC's international activities, and describes the potential internal and external challenges ICBC will confront in its forthcoming "going global" journey. The strategic avenue for ICBC is the core part of this thesis. The author presents four strategic avenues for ICBC to facilitate its internationalization development: (1) Achieving strategic partnerships with foreign financial institutions to get access not only to their international experience, best practice, and training program, but also to their complementary business line and geographical reach; (2) Focusing on emerging countries as the priority location thanks to their high and robust growth, huge potential, low competition, tight economic connection with China, fast opening of banking industry and less affected by the subprime credit crisis. (3) Mainly depending on M&A as the entry mode to satisfy the increasing customer need, take advantage of its high P/B ratio, get exposure to the resources of acquired banks, follow a short cut going into the mixed operation and evade some entry barriers and unfavorable regulation from host countries. ICBC should take strategic investment as the target screening principle and pay enough attention to post merger integration. (4) Initiating different business development strategy in different countries based on their respective underlying conditions and insisting localization in terms of funding source, asset investment, human resource and customers. At the same time, implementation of New Basel Capital Accord will provides ICBC with a framework to address operational risk issues.