The Research On "Going Out Strategy" Of Commercial Banks Of China

As the development of reform and opening policy in our country, the arrival of the open economy arises at the historic moment. Facing the growing economic environment of home and abroad, China, as the rising economy entity, is integrating in depth with the world economy, and incorporating with it with more active attitude. At the same time, the enterprises from our country are causing a wave of "going out", and forming a certain scale. Commercial banks, as the fundamental industry in financial sector, are also having showed a positive trend of expansion overseas. Since last century, our commercial banks have followed closely the going-abroad enterprises, developing overseas business in multiple approaches and ways, which are not only aimed at promoting domestic enterprises’ business abroad, but also to seek a new point for profit growth in the world. In addition to domestic enterprises’ international operation needing backup support from our commercial banks, internationalization of RMB is also inseparable from the internationalization of domestic commercial banks. From past experiences of other countries, commercial bank’s internationalization and the internationalization of RMB are mutually influenced and promoted:through backflow of RMB and its investment channels, RMB internationalization can build offshore centre, making good adjustment in the whole system of Chinese commercial banks and improving their openness market competitiveness. In addition, our commercial banks have the ability to assume the RMB international settlement and the establishment of their global network would be conducive to promoting cross-border RMB business, so as to promote the realization of the RMB internationalization. Therefore, the "going out strategy" conducted by our commercial banks is the basis of the realization of China’s financial globalization, as well as an important force of providing support for multinational companies, and realizing economic globalization in China.Under the changing background of current monetary system and international financial situation, commercial banks are in the early stage of internationalization strategy. Due to the large institution system, intensely domestic competition and the limitation of parent banks’ development, our commercial banks could not promote alone. They have to find ways to develop international operations. The most direct way is the expansion of institution itself which can be described as "going out strategy". In the current situation, state-owned commercial banks are the main body in this strategy, and other shareholding commercial banks are stepping up the pace of going abroad and becoming the emerging investors. Most choice on target region of investment focused on HK and Macao first, then extended to Asia, then expanded to other western developed economies. Our commercial banks’overseas performances are constantly rising, as well as the overseas assets, but the diversification degree of their business is not that good. This paper drew the conclusions above about the current situation of China’s commercial banks’"going out strategy" by comparing the data, and then using empirical analysis to find their causes. In the regression results, our country’s commercial banks have obvious motives to follow their corporate clients which have business abroad, and there is another driving force that is obtaining advanced management experience and technology from developed economies and occupying the market, and with the constant improvement of the current level of science and communication technology, geographic distance will not cause great effect on choosing target countries.Then this paper analyzed four aspects of factors to affect the "going out strategy" implemented by commercial banks in China. The advantage factors are the high international competitiveness of the main investors’asset scale, quality as well as profitability, in addition, Chinese government and the state-owned enterprises as main investors in banks provide supports for banking credit. From the point of disadvantage factors, they are mainly focus on lack of experiences in international development, insufficient innovation ability and inadequate senior talents. The chance factors are the trend of RMB internationalization, the great overseas expansion of domestic enterprises and the good domestic policy environment. Finally from the view of threat factors, they mainly concentrated on strict regulatory law in the target area, the sovereign debt crisis and the information asymmetry in capital valuation. Therefore, faced by the going-out Chinese commercial banks is a long and hard way in the multinational business. But if they can avoid risk reasonably, change their weaknesses, seize the opportunity and make full use of advantages, the banking industry in China will create the prosperity scene on the world stage.The last part in this paper put forward several targeted countermeasures and suggestions based on the problems involved in two core parts of this paper which is the current situation and the influencing factors in our commercial banks’"going out strategy", and these suggestions have also referred to two outstanding multinational banks’ successful experiences in overseas development.