Business is booming for banks in Mainland China. The banking industry recorded a strong growth in lending in recent years. According to the findings by the Chinese government, increased lending in local currency was extended mainly to retail customers by Chinese banks while foreign banks focused their lending largely on corporate customers.
(a) Many foreign banks are actively developing their businesses in Mainland China. Critically discuss three major business considerations behind their strategies.
(b) Many local banks in Hong Kong are also pursuing expansion plans in Mainland China. Will this industry trend undermine Hong Kong’s status as an international financial centre? Explain your view in detail.