Motivation And The Advantages And Disadvantages Of Overseas Investment Of Chinese Commercial Banks

Commercial banks overseas investment is a trend in today’s world bankingindustry, has been a research focus of domestic and foreign scholars. With China’saccession to WTO, and the full liberalization of the financial market, foreign bankscontinue to enter China, overseas investment research for multinational banks havebecome an issue of concern scholars, but for Chinese commercial banks to foreigninvestment issues in the initial foreign investment but few people involved. U.S. andEuropean banks to the financial crisis caused a significant trauma, provides a goodopportunity for overseas investment of Chinese banks. In this paper, the backgroundof the financial crisis, overseas investment research questions Chinese commercialbanks, with a strong practical significance.This paper is divided into five chapters.Chapter1is an introduction. Introduces the background and significance of thestudy; followed a literature review, especially on overseas investment activities ofmultinational banks for theoretical research scholars overseas investment bymultinational companies formed a brief combing the relevant literature and tosummarize and comments; finally introduced the innovation and inadequate researchmethods as well as the paper.Chapter2of the present situation and characteristics of Chinese commercialbanks overseas investments are outlined. In the agriculture, industry, construction offour state-owned commercial banks as the main advantage of the latest statistical datato describe the current situation of Chinese commercial banks overseas investment,summed up China’s commercial banks overseas investment has characteristics: thefour major commercial banks to become overseas investors, overseas investment layout more concentrated, increasingly diversified investment.Chapter3analyzes the motivation of Chinese commercial banks overseasinvestment. This paper will present motivation theory into intrinsic motivation andextrinsic motivation of both commercial banks overseas investment. Firstly, theintrinsic motivation, the first is to get more economic benefits, efficiency theory thatincreased foreign investment activity can bring social benefits, improve the efficiencyof the transaction participants; second is to occupy a larger market share, marketforces theory overseas investments as an effective means to improve market share,while foreign investment will finance game theory as a game, overseas investment willproduce first-mover advantage. Second, analysis of the extrinsic motivation, are: thedeepening of financial liberalization and open financial markets, banking competitionintensifies, several impacts and promote the role of the financial crisis in informationtechnology. Finally, the status quo of China’s economy and banking features,summarized motivation banks overseas investment, mainly in its own internal strengthenhancing and expanding profits, decentralized needs of risk, external factors includethe development of multinational corporations, financial regulatory approach changesthat affect trade and investment and increasing financial globalization and the financialneeds of the residents of overseas-funded enterprises abroad.Chapter4is for Chinese commercial banks overseas investment advantages anddisadvantages of specific analysis. Using the latest statistical data, respectively, fromtheir home country level and the current level of overseas investment of Chinesecommercial banks have to analyze the advantages and disadvantages. From theirperspective, the main advantage in large scale, reputable, close customer relationshipsand information superiority; disadvantage is a lower level of management,profitability is weak, lack of overseas investment experience. From the perspective ofthe home country, including the advantages of sustained and rapid economicdevelopment, foreign economy has made considerable progress, government supportfor the policy of commercial banks overseas investment. Disadvantage for the reformof state-owned banks, and low hysteresis property rights system of the central bank’s monetary policy transparency.Chapter5, some suggestions for strategic overseas investment of Chinesecommercial banks. The first is to have clear strategic goal orientation, and secondly tolearn the basic layout of overseas investment banking experience, the mostfundamental is the formation of the overall strategic situation of commercial banksoverseas investment, starting from Hong Kong, Macao and Asia-Pacific, Europe andAmerica gradually open up, while focusing on emerging market.