Development Strategy Of Foreign Banks In China

With China’s reforming and opening-up constantly, especially after entering the WTO, our export-oriented economy has gained a quicker development. The foreign banks have been in China since the end of Qing Dynasty and their stable development also has a history of more than30years since China’s reforming and opening-up. The foreign banks’ operation in China, the number of network and scope expand continuously, and the foreign banks have become an indispensable strength in China’s financial markets. Currently, our financial market is becoming more and more open, and the power of Chinese banks is increasingly strengthened. Under these circumstances, how should the foreign banks make full use of the opportunities that brought by the openness of the financial market? And what should the foreign banks do to keep their advantageous position in the competition with Chinese banks? These are the important problems that faced by foreign banks.This paper sets the foreign banks as the starting point, and bases on the theory of strategy management. By comprehensive use of the literature research method, case-studying method, comparative studying method and combining qualitative analysis and quantitative analysis, and relying on the tools of PEST analysis, five competitive forces model, EFE matrix, IFE matrix and SWOT analysis, this paper systematically analyses the development strategy of the foreign banks in China.Firstly, this paper summarizes the strategic management theory systematically to be a theoretical foundation of the study. And the paper reviews the research about foreign bank related problems of the domestic and overseas scholars to establish the reference frame of the study. Secondly, the development of foreign banks in China is analyzed comprehensively by the aspects of the stage of development, the entry mode, space layout, business situation, supervising actuality and so on. Thirdly, the external macro environment and the external industry environment of the development of foreign banks in China are analyzed by PEST analysis tool and five competitive forces model. Through the research of the external strategic factor evaluation matrix, this paper finds that the external macro environment has stronger attraction to foreign banks which has stronger industry competitiveness than Chinese banks. Fourthly, on the basis of analyzing the tangible resources, intangible resources, financial capacity and marketing capacity of the foreign banks, and through the research of the internal strategic factor evaluation matrix, this paper finds that the foreign banks have the more powerful competition in Chinese market. Fifthly, by summarizing the external environment, we get the opportunities and threats that the foreign banks confronted with. And the analysis of the internal environment lets us learn the strengths and weaknesses of them. Then we use the SWOT analysis matrix to get the strategy choice of the foreign banks in China. Finally, according the different strategy choice, we make the implementation on the development strategy of the foreign banks.