Will foreign and domestic banks be competing for the same territory?
Not only will foreign banks remain subject to a tough regulatory environment, even after the removal of specific restrictions directed at foreign institutions, they will also be competing for the same territory as domestic banks. Already, Chinese banks have won a number of large dollar-denominated business loan projects for foreign companies in China. Domestic banks have moved to improve their services with longer hours and friendlier staff, supported by a large number of branches. Foreign banks will not be in a position to win significant market share in the short term and will not necessarily engage in expensive branch expansion until staff and operational systems are in place.
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