A Study On The Determinants Of OFDI By Chinese Banking

Under the advancement of global economic integration and financial integration, economic links between countries around the world continue to enhance, and international investment has become one of the important ways of participating global economy and the important symbol of opening degree, international competitiveness and economic development level for one economic entity. And the outward foreign direct investment of Chinese banking has been thrust into the limelight. Although foreign direct investment in China’s banking industry has only just started in recent years, the speed and scale of its development should be emphasized. With the deepening of strategy of going out, outward direct investment in Chinese banking sector presents the new features. It has become a new force of some international influence in financial industry. It is urgent to strengthen the study on the determinants of outward foreign direct investment by Chinese banking.In this paper, both theoretical analysis and case method have been used. Firstly, based on dunning OIL paradigm, the paper explains the determinants of outward foreign direct investment of Chinese banking; then concretely analyze them combined with Industrial and Commercial Bank of China, aiming at exploring the determinants of outward foreign direct investment of China’s banking and analyzing its advantages. Finally, draw the conclusion that the Chinese banking industry has had the advantage of the outward foreign direct investment, and "follow the customer", expanding market share abroad, diversified and dispersed financial risk are the main motivational factors. To enhance the advantages of Chinese banking sector’s "going out", the paper proposes eight suggestions on the basis of the previous analysis:Firstly, further tighten financial supervision; Secondly, further strengthen the internal control system construction of the commercial banks; thirdly, set a clear strategic objectives which combine the mature markets and emerging markets; Fourthly, maximize the synergistic effect; fifthly, choose the best way to be internationalized; Sixthly, be committed to the local business; Seventhly, choose the entering mode according to the local conditions; Finally, internationalize the personnel.Since2003, China’s banking sector has carried out a series of positive and effective reform and innovation, and Chinese banks have increased significantly in corporate governance, profitability and competitiveness, and other aspects..Since2007, with the fully opening of Chinese banking market, the influx of foreign banks has increased the intensity of competition in the industry, and made Chinese commercial banks clearly understand the need to further accelerate the pace of their international operations and raise their degree of internationalization, thus enhancing their international competitiveness in the financial markets. Hence, a systematic study of determinants of outward foreign direct investment by Chinese banking has some theoretical and practical significance.