A rapidly evolving domestic and international landscape is shaping a new wave of internationalisation opportunities for Chinese Financial Institutions. While the COVID-19 pandemic has triggered worldwide discussions on ‘de-globalization’, the situation has seemingly increased China’s commitment to becoming open to the world. As such, this might accelerate rather than slow down the process of globalization for Chinese FIs.
However, internationalization beyond serving local clients remains challenging for Chinese FIs. We have identified five key strategic topics for Chinese FIs to consider as they articulate their positioning and value propositions in order to become truly competitive in the global arena. First, we see an opportunity for Chinese players to develop global businesses that offer their clients universal banking solutions. Further, Chinese players can grow in scale and offering breadth through partnerships with FinTechs and regional FIs, both for ‘supporting outbound Chinese demand’ and ‘exporting China know-how’. Chinese FIs also need to selectively identify the overseas markets to grow, considering factors such as emigration and offshore allocation patterns. Lastly, Chinese FIs need to design operational setups to align with overseas aspirations, and ensure they develop sound governance models compatible with global best-practices.
This will lead to three key battlegrounds for the future of the FS business: pan-Asian and BRI markets, onshore Chinese markets, and the established home markets of Global FIs. As Chinese players internationalise we see intense competition, but also opportunities for collaboration.