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.

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