The Empirical Study Of The Impact Of Strategic Investors To Chinese Banks

Ever since the opening-up of C economy, eye-catching improvement has beenmade. As the development of economics deepens, the reform of the financial system ofChina is rather urgent. Banking system, which is centered in the operation of economyand of strategic importance to the health of financial reform, needs to improve itsgovernance structure and operating efficiency, to create a more competitive bankingsystem. China s entrance into the WTO, bring both opportunities and fierce competitionfrom foreign counterparts. How to maintain the current market share in this complicatedenvironment and promote the development of the domestic financial institutions are onthe top agenda of domestic banks and Chinese government. In the light of successfulpractice in other industries, banks start to seek foreign strategic investors, as a way tocomplete the reform in banking system.This study is dedicated to trace the improvement of the operational efficiency ofChinese banks owing to the foreign strategic investors. Firstly, it has concluded thetheoretical importance of the strategic investors, based on which, we believe it isnecessary to admit the strategic investor is a wise choice. In the empirical study part, inorder to investigate the deep reason of the empirical results, this essay divides it into threeparts. By looking into the possible channels through which the strategic investors maypenetrate into the domestic institutions, this study has answered the questions of what,how and why. In the end, based on the discoveries of this study, some suggestions hasbeen posted for banks and governments concerning how to maximize the role of theforeign investors and help realizing the expected results.