(22 May 2012 – China) For Chinese banks, foreign expansion is “irresistible” according to Yale University Chinese finance professor, Chen Zhiwu.Zhiwu, said Chinese banks were undergoing a “strong expansion phase” to support overseas expansion by Chinese business firms.
He believes the acquisition of control over Bank of East Asia by the Industrial and Commercial Bank of China and its financial partners will be the first of many by Chinese banks.
As more Chinese businesses expand abroad there will be higher demand for Chinese banks to open branches abroad to provide better financial services.
The internationalization of the renminbi will also help the China banking foreign push.
He noted the strong expansion pace of China banking abroad is mainly due to three favourable factors:
Foreign trade growth has pushed the financial demands on Chinese banks, including traditional trade payments forward.
Demand from financial organisations that Chinese enterprises develop abroad since Chinese banks are more familiar with Chinese enterprises.
Many European and United States banks have become potential M&A targets because of their weakening due to the eurozone and debt crises.