An Empirical Study on the International Competitiveness of Chinese Commercial Banks

Chen, Hong and Yuan, Yuan (2011) An Empirical Study on the International Competitiveness of Chinese Commercial Banks. Economic analysis, 44 (3-4). pp. 12-34. ISSN 1821-2573

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Abstract

According to the Chinese government’ commitments while entering the WTO, now China has cancelled many restrictions for foreign banks including the restriction of foreign exchange business, the geographic restriction of RMB business and the restriction of the establishment form of foreign banks. Foreign banks are now permitted to offer services to all Chinese clients and to set up the same city services points to make cross‐region business. It means that nowadays foreign commercial banks and Chinese commercial banks are standing at the same start line to compete with each other. The innovation of this paper is mainly reflected in the following three aspects. First, we made a complete and systematic summary about the latest achievements on the competitiveness of commercial banks, including the foreign and domestic authoritative method of the evaluation of international competitiveness of commercial banks, in order to build a solid theoretical foundation for the empirical analysis. The second is the multilevel empirical method. In addition to the innovation on the selected indicators of the traditional factor analysis, we also made a cointegration analysis on the macro‐level variables which further strengthened the content of the international competitiveness of commercial banks. Thirdly, the data used in the empirical analysis are the latest ones released by the official website of the commercial banks, statistical agencies, regulatory bodies and related database by 2010, in order to ensure the validity and the timeliness of the empirical results.

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