Foreign Strategic Investors in the Chinese Banking Market: Cultural Shift or Business as Usual?

Publisher:
ThomsonReuters
Publication Type:
Journal article
Citation:
Hawes Colin and Chiu Thomas 2007, 'Foreign Strategic Investors in the Chinese Banking Market: Cultural Shift or Business as Usual?', Thomson Carswell, vol. 22, no. 2, pp. 203-237.
Issue Date:
2007
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Several recent studies have analyzed the reforms to China’s banking system since the mid-1990s and their effect on Chinese banks’ financial position and performance. But the past year has seen a sudden rush by major Western financial institutions to purchase minority stakes in Chinese banks in order to assist those banks to improve their performance and in the process gain access to extensive Chinese branch networks to market their own products. The Chinese government calls this policy “introducing foreign strategic investors to Chinese banks.” There has been little discussion of the widely differing corporate cultures of Chinese & Western banks, and how these differences may obstruct their ability to work together for mutual benefit. This paper fills the gap, arguing that Western banks will need to modify some of their basic assumptions about how banks do business if they wish to maintain harmonious relations with their Chinese strategic partners and succeed in China over the long term.
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