Foreign banks in the People's Republic of China

Many foreign banks are attracted to the PRC economy, as a result of its continuing economic growth and financial liberalisations. This paper provides an empirical analysis of the factors contributing to this development and of the features of those foreign banks choosing to enter this market. In addition, a survey questionnaire permits an assessment of the attractions and weaknesses of the PRC banking market as perceived by foreign banks. It has been shown that large, financially sound foreign banks have helped to stimulate trade and investment in the PRC. However, China's restricted movement of capital and inadequate legal framework has reinforced the need for international banking services from Hong Kong.