A Study On The Development Of Korean-owned Banks In China

Since the first Korean-owned banks to set up a representative office in China in1992, the development of Korean-owned banks in China has gone through a full20years. In the past20years, the increasingly close economic and trade exchanges between China and South Korea, intensive and large economic and trade exchanges will undoubtedly provide adequate nutrients for the financial ties between the two countries. The number of Korean-owned banks in China develops from one representative office in1992to10Korean-owned banks in2011, a total of more than50branches set up in14cities in China, including five corporate banks which owned a total of42branches, two overseas branches which owned a total of6branches, and others at the nonprofit representative present. Taken china’s accession to the WTO as a dividing point, Korean-owned banks experienced in course of development restrictions on the development stage and stage of rapid development. During this period foreign banks in China achieved rapid development, Korean-owned banks are same. But there is also a strange phenomenon that is Korean-owned banks in China which have the case of the early development and a variety of favorable conditions for the development, remains a big gap with other foreign banks, this place makes very puzzled.With this question, the paper on the development of Korean-owned banks in China is depth inquiry. The first is to study why Korean investment bank in China. Based on the analysis transnational development of foreign banks put forward the specific reasons for the development the Korean-owned banks in China can be summarized as follow home country customers and open up the Chinese market. In this paper, the regression analysis method to verify the above reasons, the number of agencies is explanatory variable to stand for the development the Korean-owned banks; China’s gross domestic product is explanatory variable to totally stand for China’s development achievements; bilateral trade volume and South Korea’s investment is the other explanatory variable to stand for the development of home country customers. Empirical analysis of development Korean-owned banks in China is to follow home country customers, rather than to develop the Chinese market, is different from other foreign banks in China which motivation is to share China’s development achievements. To a large extent explains why Korean-owned banks compared to other foreign banks in China developed slowly, pointed out power sources to achieve rapid development in the future. Secondly, in order to further verify Korean-owned banks in China and lay substantial background for other analysis in this article, this article will detail the course of development and characteristics of Korean-owned banks. As time is not long and the amount is limited, to make development process of Korean investment banks clear, this article listed the number of agencies and specific timetable for setting up in tabular form, taken china’s accession to the WTO as a dividing point, Korean-owned banks experienced in course of development restrictions on the development stage and stage of rapid development, summarizes the characteristics of each stage. Thirdly, in order to more in-depth understanding of the development of the Korean-owned banks in China, This paper uses a more classic management science-SWOT analysis method to analysis of the competitiveness. Comprehensive description and evaluation exist in this method for its internal features and external environment, divided into four aspects of the Korean-owned banks in China which are internal strengths and weaknesses, external opportunities and challenges. In specific analysis this paper mainly takes specific matters as examples to corroborate and make appropriately summarize. A simple comprehensive comparison through internal pros and external cons can make the overall competitiveness of the Korean-owned banks clear and know them the current environment, the problems and the future development of space in this living condition and provide rich material for the next phase. Finally, this is the most important part. It is also divided into two blocks; the first block plays a role as supporting base which contains Korean-owned banks to change their original concept, a clear market positioning and attention the action to implement; The second block is to propose specific development proposals including two aspects which are development direction and specific development proposals. The first aspect contains the localization and differentiation of two strategies, whose localization strategy is limited and virtual, and then their efforts should be made to strengthen localization strategy’s depth and establish three-dimensional concept; Differentiation strategy of Korean-owned banks compared to other foreign banks or Chinese banks don’t have obvious advantages, failed to effectively utilize and highlight the advantage of its own internal and external advantages and existed the risk to gradually lose their original advantages, so Korean-owned banks in the capital, scale and dot unfavorable competitive circumstances should focus on building and strengthening their own differential advantages. On the other hand, in the grasp of the strategic direction based on the previously mentioned, makes full use of the SWOT analysis above which derived from a variety of analytical results, supplement by other aspects of Korean investment bank thinking, finally put forward a total of eight specific development proposals in this paper.In addition, this article takes the Korean-owned banks as a warning to suggest on the overseas development of China’s banking. Mainly in the aspects of the strategy, culture, market, business, internal control, brand, China’s banking should systematically construct and gradually improve. It will be helpful to take Korean banks as a strong reference to the overseas development of China’s banking.