The Entry Strategy of Foreign Bank in China

This study, using a questionnaire survey and multiple regression analysis, examines to what extent the multinational banking theory is a practical match suit for China market. It discusses what are entry strategies foreign banks have taken to enter into China and what are the main determinants driving foreign banks to China. More details are provided through analyzing the survey results to interpret what are the practical strategies in the dimensions of institutional forms, location, motives, activities, competitions, advantages, risks and the relationships with local banks. A multiple regression framework, through assuming that GDP represents the motive of "searching for new business opportunities", FDI represents the motive of "following clients" and bulk of imports and exports represents "trade financing", to testify which are the key determinants driving foreign banks to China. This article also introduces the background and imperfection of China's financial industry even referring to the macroeconomic and cultural issues to persuade foreign banks that have intentions to enter into China to have a warning awareness that something should be avoided.