China's Commercial Banks Operating Synergies

Since the 1980s, the Western countries have sped up strategic adjustments in their financial services sector and universal banking is becoming an important trend of the world's financial development. In recent years, with the opening up of China's financial sector, the business environment has undergone major changes and is becoming tougher for Chinese commercial banks. At the same time, Chinese commercial banks are in urgent need to expand the space for growth after a series of financial reform and innovation. The new situation provides both internal momentum and external pressure to implement universal banking for Chinese commercial banks. With financial deregulation in China gaining foothold, the domestic commercial banks have accelerated their pace towards business integration.Rosabeth Moss Kanter, a Harvard University Professor and expert in corporate innovation and change, pointed out that obtaining synergies is the only reason to the existence of a diversified company. Creating and obtaining synergies therefore should become the theoretical source and essence of universal banking of Chinese commercial banks. But can synergies be realized through business integration? What are the key elements affecting the synergy effect? How synergy effects could be brought into full play? This paper tries to provide useful advice and concrete evidence to the universal banking of China's commercial banks after thorough study of Chinese and foreign literature and analysis on the experiences of foreign banks in achieving synergy through universal banking.Starting from the relationship between the universal banking and synergy effect, the article analyzes the issues on comprehensive management of Chinese commercial banks, using a variety of means such as case study, comparisons, and positive analysis. Chapter 1 introduces the background and significance of the study, the current academic environment, methodologies employed and innovations and weaknesses in this field. Chapter 2 analyzes the economics and factors affecting synergy and illustrating universal banking in relation to synergy. Chapter 3 provides a case study and positive analysis on the practices of achieving synergy through business integration by foreign commercial banks. Chapter 4 carries out a positive study on China's practice. Chapter 5 gives the author's suggestion on universal banking at the backdrop of the ongoing financial crisis.