Research On The Core Competitiveness Of Foreign Banks In China

Foreign banks entered China in the Qing Dynasty,in the beginning. With the advent of reform and development in 1978,the development of foreign banks in China experienced starting period, rapid development period, adjustment period and accelerated development period.When acceded to the World Trade Organization in 2001,China gradually eliminate the restrictions on the service objects of foreign financial institutions and cancel the protection measures for the domestic banks.Domestic banks and foreign banks have a comprehensive competition together.With the enjoying “national treatment”,foreign banks’ number of branches,size of assets and scope of business are expanding in China.With the increasingly fierce competition in the banking industry, foreign banks have a positive demonstration effect for Chinese banks on mature management and solid strength in services, products and technology.Facing the fierce market competition, strengthening the core competitiveness of Chinese banks are of great significance for not only survival and development of Chinese banks, but also for domestic financial security and economic stability.With the opening up for domestic financial market and the continued enhancing for foreign banks in China, how to grasp the opportunity of development bringing by financial market opening for Chinese banks and how to use their advantages to attain to a favorable position competing with foreign banks will be the main content of this article.Basing on the core competitiveness theory and the collaborative management theory,this paper systematically formulates the core competitiveness of foreign banks in China.Firstly,the core competitiveness theory and the collaborative management theory are reviewed in this article,at the same time,the paper summarizes the domestic and foreign scholars’ research on the core competitiveness of the theory which provide a theoretical basis and a frame of reference for the research.Secondly, the foreign banks in China are analyzed from the development stage,the way of entry and the current situation of management.Thirdly,establish a theoretical model and construct a foreign banks’ index system of core competitiveness based on the principles of scientific,comparability,data availability and comprehensiveness.Fourthly,taking the 20 foreign banks in China as samples,calculate its core competitiveness by the method of principal component.Results show that the core competitiveness of foreign banks in China are related to four components:resource acquisition capability,safe and operational capabilities,profitable,innovative capacity.Fifthly,use compositesystem coordination model to calculate the competitiveness of foreign banks and verify the evaluation index system.The results show that the degree of management synergy is positively related to the core competitiveness.Sixthly, according to the results of empirical analysis, provide reasonable suggestions for Chinese banks to use their advantages to deal with the competition of foreign banks.