Banking prospects in China

In recent years, the open door policy of China has made it attractive to foreign investors. Hence, China has become a potential market for many different types of businesses. Singapore businessmen are constantly encouraged to venture into China by the government. Since every business requires the use of at least one banking service, Singapore banks are therefore motivated to support local businessmen who are investing into China. "Banking should not be viewed as a short-term business but one that requires long-term planning in order to get maximum returns. Local Singapore banks have to go into the region to support the national objective of developing an external wing to the economy. If the local banks do not support companies moving into the region, no one else will." This was quoted by Mr. Peter Seah, Chairman of the Association of Banks in Singapore, in an interview with the Straits Times. Thus, one should recognise that with increasing number of Singapore businessmen venturing into China, opportunities remain galore for Singapore banks to venture into China. The purpose of this report is to provide potential banks intending to venture into China an overview of China's banking sector and her economic conditions. In addition, it aims to help these banks recognise the opportunities and problems encountered in the China market. In the analysis of this report, our group has recommended the potential locations and banking products and services available to Singapore banks venturing into China. The final wrap up includes the forecasting and analysis of the future trend of China's banking sector. The required materials for the whole project were gathered from literature review, newspapers and financial journals located in various institutions in Singapore. The main motivation behind this report is the keen interests to keep ourselves up-dated on current issues in the regional financial markets. Thus, due to the dynamic growth of China's financial sector, it is important for future bankers to have an idea of its banking mechanism and prospects. Last but not least, the importance of China's banking sector should not be overlooked. The need to keep track of its advancement is vital.ACCOUNTANC