| Summary: | 碩士 === 國立臺灣大學 === 臺大-復旦EMBA境外專班 === 102 === Taiwan and Mainland China have signed the " Memorandum of Understanding (MOU)" and " Economic Cooperation Framework Agreement (ECFA)" in 2009 and 2010, respectively. Cross-Strait business relationship is getting closer in the financial sector. However, China has opened her market to foreign banks since its joining with WTO in early 2001 and decisions of financial market deregulation in 2006. Hence, Taiwanese banks would be gradually losing their competitive edge if not taking effective measures to overcome these disadvantages soon.
Taking this issue into serious evaluation, the present research applies both industry analysis and regional strategy framework to explore determinants of bank performance in the Mainland China market and how foreign banks could successfully create foothold in this emerging market. We take Hana Bank as a case study to enrich our research observation.
First of all, this research found that according to Porter’s five-forces analysis, the key factor which affects the overall profitability in China’s banking industry is severe internal competition, and therefore creating differentiation within the similar-sized banking group becomes a critical factor for success. Besides, to the majority of foreign banks, China’s banking industry and regulation exist different levels of ‘distance’, according to Ghemawat’s CAGE framework, to overcome. Therefore, we suggest future contenders have to consider both adaptation and aggregation strategies in the same time. Moreover, arbitrage strategy based on reciprocity agreement is also useful. Suggestions to Taiwanese banks are also provided.
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