Chinese Banks’ Overseas Layout And Foreign Banks’ Existing Modes In China: Under Banks’ International Background

With the gradual increase in the degree of global economic integration, "open-up" has become one of Chinese key economic issue. In this context, banking industry inevitably need to open-up in order to satisfy the real economy. China has proposed an internationalization strategy combining “going global” and “attracting foreign investment”: encouraging local banks to go abroad to participate in international operations while opening Chinese banking sector to foreign investors.One part of the internationalization strategy of China’s banking industry is "going global". We describe the general outline of Chinese banks overseas strategic layout, summarize the characteristics of Chinese banks overseas layout, and point out the overall low level of Chinese banks’ internationalization at this stage. Then we conduct a case study of ICBC applying the real option theory, and provide other Chinese banks with a valuble reference by concluding three typical strategic expansion modes:(1)Chinese banks should take full advantage of local regulations, consciously get the option to reduce their cost of entry;(2)Chinese banks should strive to get an explicit call option during the negotiation in mergers and acquisitions;(3)In order to find their strategically cooperative partners with complementary resources, Chinese banks should develop a clear overseas strategy.Another part of the internationalization strategy of Chinese banking industry is "attracting foreign investment". With the full opening-up of Chinese banking system, foreign banks’ modes of existence in China is diversified. We study 83 foreign banks’ modes of existence applying a discrete choice model, identifying factors that influence the exist modes issue of foreign banks in China. We take 5 modes into consideration. In particular, this paper measure internationalization strategy of foreign banks from the view of institutional layout, and combining with real options theory to consider banks’ layout strategy in emerging markets. The results show that internationalization strategy, asset size, familiarity with Chinese market, bilateral economic ties and home market scale have significant impacts. In addition, this part provides Chinese banks’ overseas development with valueble references.