Analysis chinese banking industry systems, processes and products Essay

chinawares rapidly developing economy is dependent on a banking industry which is controlled by the state. The foursome public banks of mainland chinaware and the Peoples edge of chinaware have a strong hold over the coarses financial system. The advent of china in WTO in 2001 and globalisation has led to a felt pick out for transformation in the Chinese economy to integrate it with the global economy. The financial empyrean allow need to support this change. An assessment of the state of the Chinese banking industry at cede and its future growth is therefore essential.Ideally this can be achieved by benchmarking a Chinese bank and a European confide, for which purpose a face withdraw of banking concern of mainland China and HSBC, London has been carried out. The aim of the investigate is therefore to undertake an analysis of the Chinese banking systems, processes and products through a case study of the above mentioned banks while the objectives of the research i ndicate assessment of the boilersuit state of the Chinese banking industry, evaluate implementation of various processes and systems and highlight the areas for growth. A deductive inductive approach with emphasis on case study has been adopted for the research.Apart from extensive secondary research through books survey, a detailed questionnaire has been administered to 40 clients a featherbed a wide cross section of personal and corporate customers of aver of China and HSBC, London which has form the key primary resource for the research. A re see of the research sources and questionnaires has revealed that Bank of China has been competent to quickly adapt itself to the changing requirements of a globalised financial environment and is providing both(prenominal) personal as well as transmission line banking services to meet its customers requirements.HSBC which considers itself as the Worlds local bank is providing a complete package of services to the corporate as well as personal client and has been victorful in implementing the same throughout the World. Its initial forays into China have also underlined the success story. The quality of service in both the banks was seen to be similar, however HSBC provided amend follow up and also more services on the mesh than Bank of China. The growth trajectory of both the banks indicates that, while HSBC is attempting to grow throughout the World Bank of China is growing primarily within the Chinese banking system.There are a number of areas for improvement identified in the research which could well be undertaken by Bank of China to allow in greater efficiency and better customer service, improvement in engineering and customer follow up and exploitation of niche areas such as credit cards. The entry of foreign banks will see greater competition in the Chinese banking sector. The need for Chinese banks to adopt global practices is also underlined and it is anticipated that the entry of more global bank s as HSBC in China will provide the impetus to this growth.ANALYSIS CHINESE BANKING INDUSTRY SYSTEMS, PROCESSES AND PRODUCTS A CASE STUDY BANK OF CHINA AND HSBC, LONDON Chapter 1 initiation China is a rapidly growing economy which is considered as a model for emerging countries all over the World. The dynamism of an economy lies in an efficient and effective financial system led by the banking sector. The sham of the banking sector on economic growth in China and its piece to public life has been a matter of debate over the years.China has a banking system which is controlled by the recount and thus has a very large influence on the economy. Exclusively controlled by the central government, the four state banks and Peoples Bank of China have a very strong hold over the financial system both internally and extraneously. (Chinas Economic System, 2004). However the rapid growth of China towards a socialist market economy has been disturbing the banking sector in various slipway and Chinese banks have undertaken measures to enhance their efficiency and take effectively to the economy.Chinas entry into the WTO in 2001 has also necessitated acceptation of liberalized norms in line with the global banking and financial industry. To what extent China has been able to adapt these new practices and how these are affecting or likely to affect the growth of the Chinese economy is an issue of great relevance. As Chinas economy gets increasingly integrated with the global economy, its financial markets will have to support this union. It is therefore essential to assess the state of the Chinese banking industry at present and its trajectory of growth in the future.A case study approach to this issue is considered relevant for which Bank of China and HSBC, London are selected for review of the systems, processes and products to provide an insight of the financial involve and their fulfillment today and tomorrow. Bank of China is one of the principal banks in the c ountry it is one of the four banks which are owned by the State in China. (About Bank of China,. 2006). It has been a key central bank of China which has carried out international exchange as well as provided gold and been a point for foreign trade in the country over a period.It conducts a wide variety of services including commercial banking, insurance policy as well as investment banking. It is one of the largest banks in Asia and has been rigid at the 18th position by the Banker Magazine in 2005. (About Bank of China,. 2006). It also has a large overseas presence in 27 countries. The systems, processes and practices followed by the Bank of China would be a good index of the state of the Chinese banking industry in both its internal and external dimensions. HSBC is an epitome of a modern bank.Based in London, the Bank had its origins in provision of finance for trading with China in the 19th Century. subsequently China adopted a nationalist communist economy and banking syst em, HSBCs presence in the country was limited. However the bank has now retuned with a vigor and strives to make inroads in the highly competitive financial sector where banks with a state monopoly are said to enjoy unprecedented advantage. The Bank is also taking benefit of its old legacy and is already earning lucre to the tune of $ 161 million for the first half of 2005.(Schuman, 2006). HSBC in some ways can be seen to be a competitor to the Bank of China, though its reach within China is limited to only 20 branches. (Schuman, 2006). The investments do by HSBC in Chinese financial sector are report to be $ 4 billion and include almost one fifth part stake in Chinas fifth largest bank, Bank of communications and its second largest insurance company, Ping An Insurance with which the Bank of China also has many contracts.A comparative analysis of BOC and HSBC would thus provide us an effective understanding of the state of the banking industry in China in all its operational face ts. The dynamic nature of the research will mean application of a deductive-inductive approach which in practice is adopted by a number of similar research projects keeping in view the importance of both qualitative and quantitative findings.