| During the deregulation of foreign banks'access to the financial market of China, more and more foreign banks are eager to be involved in China's financial market and some of them have managed to greatly extend their influence in China market by equity investment into commercial banks of China. This phenomenon attracts my attention in a way that how Chinese local banks should correctly face this situation and how to deal with it in a bid to mostly benefit from it. The structure of the paper consists of five parts. The first part introduces theory of cooperative competition which lays a foundation of the paper and helps to analyze the motivation of equity cooperation for foreign banks as well as domestic banks. The second part mainly focuses on the external environment of equity cooperation which includes the development of Chinese economy, Chinese banking industry and forms and contents of equity cooperation. The third and fourth part disclose motivations of foreign banks and Chinese banks in equity cooperation and separately analyze each other's comparative strength, weakness, opportunities and threats in the cooperation. The fifth part is the conclusion of the whole paper, and tries to provide some constructive suggestions to Chinese banks in their decision making in equity cooperation with foreign banks.We believe that foreign banks'equity investment as a strategic investor into Chinese banks will help local banks improve its corporate governance, assets quality, product innovation, management and capitalization. However, on the other hand, it may also bring problems and risks to Chinese banks in the aspects like interests conflict, cultural confluence, control capability, etc. Therefore, only through a deep study of the situation and analyze its pros and cons for Chinese banks can Chinese banks make right decisions and take proper measures to face equity cooperation with foreign banks and make a way to seek for further development. |
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