The latest news in China's banking industry is Hua Xia bank is went after by many foreign banks such as Deutche Bank and Singapore DBS. As one of the five listed bank in China, it may be famous but I am sorry I never use its service before. Just wonder why it is so attractive in a near-double price that its paper value in the stocks.
Foreign banks have their own reason to buy to try to grab a bit before the other competitors get into the China. But the problem is not all the banks are well set up. Not to say the state-owned ones, but the private-developed banks are learning bad habits for the goverment-backed ones. The only good bank I think is China Mercants Bank, for its efficiency service and advanced web system. The only advantage is it is not government-backed, which means it couldn't enjoy the benefits as those giant and slow banks do.
I always think there are problems between China's fast developing economy and its weak banking system. In some means, the banking system on the typical examples based on the political systems.
If banking systems develop in a foreign way,how about the political system?
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The banking industry in China now is just like what we have in HK in 1970s. The industry is underdeveloped but there are lots of opportunities. For example, mortgage system is nearly not developed in China. As the growth of the property market in China, it is foreseen that revenues from mortgage will increased significantly in the next 10 years. Of course, as what we encountered in HK bank industry in the 1970s, we may see some of the small banks will have cash flow problem and will go to bankrupt. But in overall, the industry is still attractive from the point of view of overseas players.
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