Strategic Analysis Of The Localization Of Foreign Banks In China

The implementing rules for the foreign Banks management regulation of the People’s Republic of China was promulgated on June 5,2006, declaring the full liberalization of China’s banking sector since 2007, foreign Banks will receive national treatment, as local Chinese banks do, in the Chinese market. Meanwhile, the rules also remove the limit of prudence and foreign Banks RMB business, the geographical and customer restrictions of foreign Banks operating in China, ensuring complete market access. With the increasing of financial openness and the good momentum of economic development, foreign Banks will have a better potential development in China in the near future. In the fully open financial market, the developing China is a brand new and unfamiliar environment for foreign Banks, in particular, the foreign capital bank management mode in capitalist countries does not apply to China mainland. Foreign Banks faces series of problems like how to adapt to the localization of development in China, how to get in China, how to establish the profit pattern in the huge domestic market, how to meet regulatory requirements for foreign Banks and other domestic regulators. These problems are that new foreign Banks under the condition of market localization strategy implementation must solve. So choosing correct effective investment strategies is particularly important for foreign Banks, the right strategy to show a multinational bank financial management level, which affects the bank’s survival and development.During the past decades, the world economy has showed its globalization and the situation of world financial system has gradually come into the development of globalization. Based on a vast amount of literature and research, we summarize the investment strategies of foreign Banks to enter China’s stage of development, the history and status. On the basis of external investing environment on foreign banks, we provide a thorough comparison with characteristics of each period of development of foreign Banks. According to the theory of transnational operation, we analyze the necessity and feasibility of foreign Banks in China localization process. Foreign banks operating in China localization, we believe that the network expansion, the company’s products, innovation, business marketing, market orientation, and the decision-making method of human resources are the key factors of localization, only with the demand of market and enterprise oriented, effectively meeting the need of consumers, can foreign banks really join into the local market and better implement the localization strategy.