The Growth Markets of China

  China, now a member of the World Trade Organisation since 2001, has become a promise land to many global financial services companies, including banks, and also insurers. It is difficult to come across a global company who is not investing or planning to expand, in China. According to analysts, the potential for growth is enormous. China opened its market to foreign companies on a limited experimental basis in 1992, however with entering the WTO, the opportunities are much wider and gradually all the restrictions are being eliminated. Economists predict China's economy is expected to grow by 7-7.5% this year, and according to a report by the International Investment Bank, China's economy is forecast to grow at an average 6% annually during the coming two decades, and become the second largest in the world next to the United States by 2030.
  According to the Standard Chartered's chief executive officer of China, foreign banks cannot take more than 10% of the China market in terms of assets until the year 2010.Foreign banks will still be subject to some restrictions over their business licensing, but China will remove its geographical and client restrictions on foreign banks to conduct business on December 11, 2006.
  China, although it is experiencing higher growth than other economies, and offers many prospects for foreign banks to invest, is not an easy market to expand into,mainly due to the above mentioned restrictions, and the fact that China is such a heavily regulated market.
  According to an article “China's market is not so lucrative “published in the Financial Times on December 4, 2004, “the fact is that foreign earnings from the Chinese economy have increased quickly, but from a low base. Indeed, many foreign businesses in China are still struggling to make money at all. We know this from surveys such as the one conducted annually by the American Chamber of Commerce. Even in 2003 -when the economic environment was extraordinarily favorable - most respondents were
unable to achieve a profit margin above their global average.”
  All these potential obstacles have to be taken into account when considering expansion in China, nevertheless, it is the global, most powerful businesses that stand the best chance to establish themselves and profit from this impressive growth that China has been experiencing. Although the Chinese market might seem difficult to enter, the fact that it offers returns not seen in Europe for a long time means that banks will try to overcome the difficulties.

摘自：《The Top 10 Global Retail Banks》