Federal Reserve Bank of San Francisco
Publications

Foreign Banks’ New China Strategy

July 29, 2005

Author(s): Richard Lung and Daniel Fineman

After watching China’s foreign direct investment boom pass them by most of the past decade, overseas banks have adopted a newly aggressive stance in the mainland market. Long-established players are expanding operations, new entrants have staked out sizeable positions, and novel expansion strategies are giving access to markets previously off-limits to foreigners. Bank investment remains a small part of total foreign direct investment, but growth is rapid. For the first time, foreign institutions appear set to play an important role in China’s banking industry. This Asia Focus report reviews the opportunities and risks for foreign banks in China.

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