Cover IMF Working Papers
The Rise of Foreign Investment in China’s Banks—Taking Stock
Author: Mr. Lamin Y Leigh and Richard Podpiera
Series:
IMF Working Papers
Volume/Issue:
Volume 2006: Issue 292
Language:
English
Publication Date:
01 Dec 2006
DOI:
https://doi.org/10.5089/9781451865523.001
ISBN:
9781451865523
ISSN:
1018-5941
Pages:
14
Keywords:
WP; bank; investor; commercial bank; China; bank entry
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Download PDF (139.4 KB) Download Epub
The recent wave of foreign investment in China's banks and the prospects of further opening of the banking sector under the WTO agreement suggest that foreign banks are likely to play an increasingly important role in China. This paper takes stock of the involvement of foreign banks in the Chinese banking sector in the perspective of international experience. While in most other countries foreign bank entry took the form of direct takeover or majority shareholding, foreign investments in China's banks have been minority shareholdings with very limited management involvement. The paper concludes that China appears to be well positioned to benefit from further opening of the banking sector to foreign investors. International experience suggests that greater competition from and participation of foreign banks can in general bring important benefits if appropriate incentives and sufficient opportunities are created.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund