A Study On The Location Selection Of Cross - Border Business Of Chinese Commercial Banks

In2001, China has officially joined WTO (World Trade Organization), and pledged togradually realize the full opening of the banking market.It allows the developmenteconomic environment of the Chinese commercial banks has become more liberal,business that can be operated also been expanded.The process of the Chinese financialmarket liberalization,marketization of interest rates, exchange rate fluctuations continues toaccelerate. And after the financial crisis,the competition of banking market slowed slightlyin the worldwide.This is the important opportunity for the Chinese commercial banks toimplement the "go out" strategy actively.Chinese commercial banks have to seize thisopportunity to develop their strength constantly.And face the competition on the worldfinancial markets to occupy a place.When commercial banks operating across borders, the problem that needs to becarefully considered is the cross-border location selection.This is the first step on the roadto the success of the Chinese commercial banks conducting cross-borderoperations.Firstly,this paper has analysed some literature at home and abroad and reviewedsome theoretical studies of cross-border operations including comparative advantagetheory,internalization theory,guiding effect theory.Subsequently combined with the actualsituation of Chinese commercial banks’ cross-border development,it analyses the Chinaesecommercial banks’ operation in the background, current situation and problems beingfaced.On the basis of these theoretical studies,this paper empirical analyse on the factorsthat affecting Chinese commercial banks’ cross-border location choice.Concluded that,thenumber of Chinese commercial banks operating cross-border positive correlates with thebilateral trade volume between China and the host country, the free trade agreementbetween China and the host country, China’s foreign direct investment in the host countryand the host country’s per capita gross domestic product.While the number of Chinesecommercial banks operating cross-border negative correlates with the geographicaldistance between China and the host country.This paper also reviews the cross-borderbusiness location selection mode of the commercial banks in the United States, Europe, Japan and developing countries.Finally combined with the empirical results and the reference of other countries’commercial banks,it makes some appropriate strategy for the Chinese commercial bankson the cross-border business location selection, and puts forword some policyrecommendations for the government and the banks themselves.For example,Chinesecommercial banks’cross-border operations should focus on Asia-Pacific region in the shortterm,europe and North America in the long term and emerging markets in Latin AmericaandAfrica advisebly.