Swot Analysis of Banking Sectors under the situation of RMB internationalization
For the strengths, first, the China banking industry has much experience in running RMB business. The activities included RMB capital marketing services, cross-boarder exchange etc. The experience creates an advantage of the China banking industry towards foreign banks. Second, banks in China are having more internationalized financial services and their abilities are more approved by foreign countries. RMB is encouraged in international trading and investment. And due to the relative stability of RMB, it is more generally accepted and used in overseas business.
For weaknesses, first, the China banking industry has imperfect and relatively weak banking system as compared with overseas banks in terms of risk management abilities and cross-boarder business and products etc. It cannot provide enough mobility to overseas RMB market. Second, China banks do not have comprehensive planning for internationalization. While they lack innovation in terms of the mode of entering the market, products varieties etc., they do not put more emphasis and resources on research and development. Third, the service flow and efficiency is relatively low of China banks as compared with overseas banks.
For opportunities, first, this is an opportunity for new business for banks offering accounts, liquidity reporting and clearing service as many people are having capability of building up RMB settlements and payments. The second opportunity is Forex trading. The revenue on trade-related Forex from Chinese corporates has been reducing, but now overseas companies need to buy RMB and do currency risk hedging. The third opportunity comes from RMB investments and securities services, as well as the complete policy liberalization in bonds and equities. More investors overseas holding RMB are seeking for returns on top of the appreciation of currency, which leads to the innovation of products. Lastly,...