...CHINA’S PERCEIVED ONGOING BANKING CRISIS By Group B Giang Nguyen 1385858 Kiet Nguyen 1402739 Tu Nguyen 1390178 Ngoc Lo 1329692 Dung Dao 1390184 Hiep Ngo 1385862 Thanh Nguyen 1385991 Anh Nguyen 1390169 Khoi Pham1385967 An assignment for ECO 3353 - Spring term, Dr. Dominic Minadeo Troy University April 30, 2014 Abstract In 2013, China, the second largest economy in the world, has experienced a banking crisis that had severely consequences on China itself and several other countries. This resulted from a rapidly rise of short-term lending from the shadow banking system, which has been considered an unofficial lending market that operates outside the scope of regulations and has recently been plunged into crisis. This paper synthesizes the overall indexes and information about the ongoing banking crisis in China, which includes: recent China economic analysis, how the crisis impacts on domestic and global economy, comparing China’s banking system to several countries in the world and the forecast for China in the near future. How the crisis took off In today’s globalized world, no country is immune from the financial crisis, even the second largest economy of the world. An increase in risky and complicated financial practices in China can possibly drive the economy to a terrible crisis. The financial crisis resulted from a rapidly rise...
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...Term paper of Ef4461 Topic : Shadow Banking in China Created by Pan Date: 24/4/2015 Abstract: In this paper , I will examine the China’s shadow banking for its potential risks. China, an expansion of risky and complicated financial practices in the world’s second-largest economy , what is the potential risk behind? Introduction: From Bloomberg, the definition of“shadow banking” encompasses risky investment products, lending between individuals, pawnshop and loan-shark operations in emerging markets, as well as more respectable activities like derivatives, money-market funds, securities lending and repurchase agreements at financial institutions These activities are beyond the control regular banking system and regulators. Therefore are exempt from the limited regulations and oversight placed on the traditional banking sector. So it is hard to restrict risky lending for the regulators. In china, savings deposit rates of 3 percent which is lower than the target for inflation, combined with at least 90% of small businesses could not get bank loans which propelled the shadow-banking sector to an estimated $6 trillion. Overview of shadow banking in the world and China There are $75 trillion global shadow banking assets worldwide in 2013 according to Financial Stability Board Report,(Appendix 2). After 2008 crisis, The U.S. and the euro area each accounted for a global shadow banking assets, followed by Britain with a 12 percent share and Japan’s 5 percent share(Appendix3)...
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...geographic elements, native income level and cultural tradition. These factors formed the economic environment in which the banks and other financial firms to make decision for investment project and exogenous financing, furthermore, the customers decide whether consumption or saving, moreover, the financial intermediaries finance the fund in which approach from savers to borrowers. The well financial system can perfect the effect of information, enforcement and transaction cost on the saving rate, investment decision and technological innovation, and steady state growth rate. Financial market channel the fund to investment opportunities to get the profit, so if the financial system cannot work well, the economic growth also more or less affected. The essay mainly gives a brief introduction on the points of financial development and economic growth based on the area of Chinese. The essay mainly talks about the theories relate to the relationship of financial development and economic growth, the determining elements to accelerate the financial development, reform in financial sector in China, and the positive relationship between financial development...
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...China’s Banking Sector The Chinese banking sector was almost completely owned by the government and it was isolated from the global economy. Chinese banks were subject to the requirements of their government’s central intended economic policy. Since 1978, the Chinese government has focused on creating a banking system with different types of institutions and agencies that function in diverse markets with clearly stipulated functions. One of the main objectives of the Chinese banking reforms has been to give incentives to the financial institutions to become more aggressive, commercial entities. Such strategy has limited the competition between such institutions and only affects the agencies that perform similar tasks. However, banks in China have not been allowed complete autonomy, and are expected to comply with government directives that who often place strategies to be used by banks to improve their profitability and their solvency. Different classes of banks are currently operating in China, with different structures and serving different functions. First, the wholly state owned banks. Second, “equitized” commercial banks or banks that were wholly state-owned and were turned into join stock firms in which the government is the major stockholder. Third, includes a mixture of local banks, with municipal governments as principal stockholders. Forth, join-stock commercial banks that were founded after the beginning of the China’s banking reforms and with relatively low...
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... Hugh THOMAS Researchers: HE Jia, Hugh THOMAS, ZHOU Chunsheng Research Assistants: WAN Yanyan, SU Jun, MAO Tianshi Part One: Background for Asian Banks’ Competitiveness Study I. Asian Banking Reform Reform has surged across the banking industry in Asia over the last decade. In the large, insular, developing economies of China and India, the reform movement originated with internationalizing and introducing market mechanisms to stimulate previously state-owned systems. In Japan and the other traditionally market oriented Asian economies, the reform was born out of crisis. Japan’s slow and painful, a decade-long recession of the 1990s, following the bursting of the bank-financed real estate and stock markets bubbles, finally led to a consensus on the need for reform. But real urgency did not enter banking reform in Asia until the Asian Financial Crisis struck the smaller, developing, market-based economies of Asia in 1997. In the run-up to the crisis, capital inflows helped fuel debt-financed investment, while stable exchange rates and surging economic growth masked the risks of many loans to leveraged and risky companies, often based more on connections than sound credit analysis. Many banks were profitable notwithstanding corruption, poor control and lax banking practices. In mid 1997, investor sentiment turned against the region, precipitating a drop in asset values, an exodus of capital, consequent pressure on local currencies, abandoning of pegged exchange...
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...The Transformation of China from an Emerging Economy to a Global Powerhouse James R. Barth, Gerard Caprio Jr., and Triphon Phumiwasana Abstract Throughout the past three decades of fast growth, China has undergone tremendous structural changes in its economy and financial system. This chapter examines China’s evolving financial landscape so as to assess whether it can catch up with or even drive economic growth. China has achieved remarkable growth over the past quarter of a century despite a relatively inefficient financial system. Just as the public sector around the world has not proved to be an efficient manager of enterprises, it also has not been an efficient manager of banks. A solution that would seem to work in theory would be to grow the private sector’s role in the banking system, using banks that operate on market principles as a way to continually starve inefficient enterprises of credit, while supplying credit to the productive enterprises. Finding a way to make this work in practice will require both finesse and good fortune on a scale commensurate with China’s growing importance in the world economy. Keywords Bank Á Banking sector Á Financial market Á Big Four Á GDP Á Economic growth Á Financial system Á Trade Á Renminbi Á Exchange rate Á India Á Foreign exchange reserve Á Non-performing loan 1 Introduction China has captured the attention of the world with its unprecedented growth for such a big country during the past 30 years. At an average rate of 9...
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...Computers in Human Behavior 26 (2010) 1296–1304 Contents lists available at ScienceDirect Computers in Human Behavior journal homepage: www.elsevier.com/locate/comphumbeh Antecedents of customer satisfaction with online banking in China: The effects of experience Cheolho Yoon * Dept. of Business Administration, Mokpo National University, Republic of Korea a r t i c l e i n f o a b s t r a c t This study investigates the antecedents of customer satisfaction with online banking in China, and explores the effects of experience on the relationships between the antecedents and customer satisfaction. Based on prior research, the six antecedents of customer satisfaction – ease of use, design, speed, security, information content, and customer support service – are proposed, and the effects of experience on the relationships between these and customer satisfaction are analyzed using a structural multi-group (a high-experience group and a low-experience group) model. The results show that design, speed, security, information content, and customer support service have a significant influence on customer satisfaction in the high-experience group or the low-experience group, but ease of use does not have a significant influence on customer satisfaction in either of the groups. Also, the results relating to the influence of the level of customer experience reveal that the effects of design, security, speed, and information content on customer satisfaction were significantly...
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...ascent into China. Word Count excluding references and table of contents: 3354 Business Management Contents Aims 3 1. Introduction 3 1.1 HSBC and China 3 1.2 Foreign Activity 4 1.3 HSBC in China 5 2. Chinese Business Environment 5 2.1 PEST Analysis 6 Political- Communism and World Trade Organisation Membership 6 Economical - High levels of FDI and a strong economy 8 Social- Education and Ageing Population 10 Technological- Accessibility 11 2.2 Analysis of the Chinese banking industry 11 2.3- Porter’s Five Force analysis 12 2.4 Culture Analysis 15 3. Mode of Entry 18 3.1 Reasons for mode of entry. 18 3.2 International Theory 18 4 - Conclusion 20 References 20 Aims This report will look at banking giant HSBCs entry into mainland China. The aim is to 1. Provide a brief outline of HSBCs entry into china, including background information on HSBC and China and take a look at the nature and location of HSBCs foreign activity. 2 Identify and analyse the main characteristics of the business environment in China that are likely to have influenced HSBCs decision to operate there. 3 Evaluate the factors that HSBC took into account when choosing its mode of international entry into China. 1. Introduction Globalisation has interconnected the world and is seen by some as an evolutionary process, although it does have its critics. Expansion into foreign markets is as a must for big businesses if they want to stay at the top of their industry. Banking is one...
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...the four major economic institutions that needed to be reformed in order for China to become a market economy. These four major economic institutions will then be discussed in detail. This paper will then go briefly into China joining the WTO and will conclude with China’s economic situation at present. Chinese economic policies and institution have undergone a number of extreme changes since the establishment of the Communist regime in 1949. After the Communist Party took national power in 1949, the disorder caused by the imperialist invasions and domestic wars were put to an end and China began to strive for development by following Russia’s example in pursuing Leninist and Marxist doctrine. By following this doctrine they would replace free market and private ownership with socialist planning and public ownership. In order for this to become a reality China had to pursue radical revolutionary domestic and foreign policies to overcome the resistance to the Chinese Communist movements. After closing its doors to western concepts of capitalism and free market economy it seemed like China was doing well but it was soon evident that the rigid planning and the command market economy was becoming inefficient. In contrast to the western economies China was indeed falling behind. Even China’s neighbors such as Taiwan, Singapore, Korea and Hong Kong were growing rapidly after adopting market economic systems. At the Third Plenum of the Eleventh Central Committee in 1978, the realist...
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...Chapter 14 Global banking Transnational Corporation (TNC) or Multinational Corporation (MNC) - It is a corporation which maintains its headquarters in one country but performs production, marketing, finance, and personal functions within many other countries. - The owners of such corporations are the highly industrialized countries of the world like United States, Great Britain, France, Germany, and Japan. Transnational Banks - International finance institutions which do their business in many countries of the world. - These are special types of transnational corporations whose field of specialization is global banking or international finance. - Their customer are primarily the transnational corporations, governments (mostly developing countries), and rich individuals. Development of Global Banking - Colonial empires, mostly European countries like Great Britain, France, and Spain, established the branches or offices of their financial institutions in their colonies in order to facilitate trade. For instance, during the British colonial empire, banks were put up in their colonies to conduct foreign exchange operations and to supply short-term funds to both exporters and importers. And as trade expanded, banks grew in number. In fact, the British banking system even reached the shores of our country during the Spanish time. - Since England is the cradle of the Industrial Revolution, it started the factory system of production. This...
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... you will use the copy only for the purposes of research or private study you will recognise the author's right to be identified as the author of the thesis and due acknowledgement will be made to the author where appropriate you will obtain the author's permission before publishing any material from the thesis. An Empirical Analysis of China Big Four State-Owned Banks’ Performance: A Data Envelopment Analysis A thesis submitted in partial fulfilment of the requirements for the Degree of Master of Commerce and Management at Lincoln University By Jiyun Xu Lincoln University, Canterbury, New Zealand 2011 I Abstract of a thesis submitted in partial fulfillment of the requirements for the Degree of M. C. M. An Empirical Analysis of China Big Four State-Owned Banks’ Performance: A Data Envelopment Analysis By Jiyun Xu Banks are becoming more international, disintermediation, concentrated and contestable in the financial market in providing services to foreign enterprises and individuals. There is also a shift from the traditional bank lending activities towards investment banking activities. Competition in financial markets encourages consolidation of banks and other financial institutions through mergers and acquisitions in order to increase contestability (Bikker & Bos, 2005). Hence, it is important to determine whether the bank is performing well under constant changes in the financial markets. This study examines the...
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...payment system for instance, in salary payment, debt payment, mortgage borrowing and payment as well as other loan services, more and more industries and institutions are dependent on banks more than ever before. This high dependability on banks is in fact making this banking industry highly competitive and concentrated as discussed below. As these industries take their time to analyze the merits and demerits of each bank in the industry and which is likely to benefit them more, the banks on the other hand strive to make their business attractive to those potential customers. What will result is onset of competition that will increase the innovativeness of the banks as each struggle to attract the highest number of industries in form of customers. Attractiveness in Banking Investment Introduction The recent years have seen a rise in large and well-established banks in developed economies. This has raised concerns on the effects such banks will have on the countries’ economy. Many economists are of the view that large banks may have a negative impact on a country’s economy as well as the borrowers. As such, there have been debates on whether or not large banks should be broken up into small banks that have less market power. Scholars from Vietnam and China advocated for the need to break up banks in order to reduce taxpayers and depositors’ risk and enhancing the bank’s leverages level. There are various benefits relating to breaking up banks. As such, China and Vietnam...
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...HSBC in China Case Analyses from Luthans & Doh, In-depth Integrative Case 4.1 Chander ZHU Dec. 2014 IBS_HSBC in China Hong Kong and Shanghai Banking Corporation was founded to finance the growing trade between Europe, India and China in Hong Kong March 1865 and month later in Shanghai. (King, 1987) With its longtime settled in China, HSBC is already member of top tier financial institutions operating in the biggest emerging market and been the largest foreign banking group in China. This essay is aiming to exam the strategy of HSBC revolution over the years in China, meanwhile to illustrate the HSBC’s strategy changed before and after China’s accession to the WTO. Then, the strategy of HSBC’s expands in China’s rural areas will be mentioned with both evaluation of advantages and disadvantages. Following, the strategy of HSBC on how to enter and operate in the other emerging markets will be discussed in terms of successful cases and setbacks. Finally, the influence from world economic crisis on HSBC and future potential opportunities for HSBC will definitely be focused on. Before the WTO accession in 2001, China’s banking industry...
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...value chain: The banking business is customer driven and therefore the banking value chain starts from the market side. The value process starts with advertising a newly developed product or service to the market. Secondly, the product/service is sold to customers, e.g. the credit contract will be signed by the customer. In a third step the product will be provided to the customer, e.g. the credit amount is paid to the account of the customer. Finally the corresponding transactions, like payments, clearing & settlement transactions etc. will be processed. The distribution part of the banking value chain consists of marketing and sales activities. Marketing includes promotion and advertising activities, branding the firm name/products/services and sales support. Sales consists of multichannel management (sales force, internet, call centers, branches), acquisition of customers and offering/pricing. The distribution part of the banking valuechain consists of marketing and sales activities. The value activities from products include the product development process as well as the provision of the product itself, e.g. the payment of the credit amount to the client. All products of a bank can be subsumed under the terms funding, investment and services. The financial intermediation business is reflected in the “funding” and “investment” parts of the product activities. The transactions part of the value chain is processing products and services offered by the banking industry....
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...objects: 0005.hk(HSBC HOLDINGS);00031.hk(CHINA AEROSPACE);0700.HK(TENCENT);00027.HK(GALAXY ENT) and 0040.HK(GOLD PEAK); Here are some introduction about them and some simple analyses will be give along with their stock price this year (from June). 0005.hk(HSBC HOLDINGS): Introduction HSBC Holdings plc is a British multinational banking and FINANCIAL services company headquartered in London, United Kingdom. It is the world's fourth largest bank. It was founded in London in 1991 by the Hongkong and Shanghai Banking Corporation to act as a new group holding company. The origins of the bank lie in Hong Kong and Shanghai, where branches were first opened in 1865. The HSBC name is derived from the initials of the Hongkong and Shanghai Banking Corporation. As such, the company refers to both the United Kingdom and Hong Kong as its "home MARKETS". HSBC has around 6,600 offices in 80 countries and territories across Africa, Asia, Europe, North America and South America, and around 60 million customers. As of 31 December 2013, it had total assets of $2.671 trillion, of which roughly half were in Europe, the Middle East and Africa, and a quarter in each of Asia-Pacific and the Americas. As of 2012, it was the world's largest bank in terms of assets and sixth-largest public company, according to a composite measure by Forbes magazine. HSBC is organised within four business groups: Commercial Banking; Global Banking and Markets (investment banking);...
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