An Empirical Study on the Impacts of the Chinese Banking Industry by Foreign Banks’ Entry

Abstract

Foreign banks entering into the Chinese banking industry have significant influence in its profitability sources including non-interest income while foreign banks bring competitions to the domestic banking sector resulting in declined profitability of the Chinese banking industry. In addition, foreign banks’ entry makes a promoting efficiency in China's banking sector. Overall foreign banks’ assets become an integral part of China's financial institutions, and they may have more significant impacts on the non-traditional businesses and operational efficiency of Chinese banking which helps the formation of healthy competition.