Research On The Discrepancies And Influenced Factors Of The Profitability Of Foreign Banks In China

Since the reform and opening up, China experienced a rapid economic development. As China enters the WTO, China’s economy and the world economy become more and more closely linked. 2015, 15 years after China’s accession to the WTO,is also the ending year of China’s "Twelfth Five Year" plan, both political and economic are faced with profound changes in the reform. With the development of global economy, fully opening of China’s banking industry and the deepening reform of the financial sector, regulatory restrictions on foreign banks in China is further relaxed, which has brought both the competition between Chinese banks and foreign banks and significant opportunities for Chinese banks and foreign banks in China.Although the market share of foreign banks in China tends to be stable, with the change is not big, the absolute amount of assets in China’s foreign banks is growing rapidly, with continuous development and expansion in China. With the rapidly development of foreign banks in China,the problem of the profitability of foreign banks is becoming increasingly prominent. Three are foreign banks which has earn lots of money while there are foreign banks that have many losses, were forced to withdraw from the market from China. Therefore, this paper will study the difference of the profitability of foreign banks, and the factors affecting the profitability of foreign banks, in order to promote the healthy development of foreign banks in China and provide domestic banks advice to promote themselves.This paper firstly describes the research background and significance of the research, and defines the content, methods, innovations and shortcomings of this paper.Then, based on reading a large number of the relevant literature related to the topic,the author make a summary and evaluation of the related research of domestic and foreign scholars in three aspects:indicator of banks profitability,discrepancies of foreign banks and the influenced factors of profitability of foreign banks in China. The study of the topic focused on the time before 2007, and lack comprehensive sample.After that, this paper systematically analyzes the time characteristics, regional characteristics and source countries of foreign banks in China, and analyzes the opportunities and challenges faced by foreign banks in China from three aspects: legalenvironment, economic environment and cultural environment.Subsequently, on the basis of the study on the profitability of foreign banks in China, this paper empirically analyzes the factors influencing the profitability of foreign banks from three aspects, which are the bank characteristic factors, industry factors and macro factors. On the basis of this, the differences in the profitability of foreign banks in China, the differences between European and American and Asian foreign banks are analyzed, and the reasons for the differences are analyzed.Finally, the paper summarizes the full text, and puts forward suggestions to improve the profitability of banks.