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China's Entry into the WTO and the Impact on Hong Kong Business

18 January 2000

Implications for banking

by K C Kwok Chief Economist, NE Asia, Standard Chartered Bank

Threats in China

• Too much hope, too little to deliver?

• Too much competition? too many banks?

• Credit problems

• Management and operational issues
  

Opportunities in Hong Kong

• Hong Kong based banks have a niche in expanding into the Mainland.

• More trade financing opportunities

• Acceleration of reform in China will bring more companies from Mainland/overseas to Hong Kong (fund raising, using HK as base, etc.)
  

Threats to Hong Kong

• HK firms will be able to get banking services in the Mainland rather than in HK

• More competition from both Mainland banks and overseas banks

• The smaller locally incorporated banks may not be big enough to compete in the Mainland (rationalization, cooperation, or M&A?)

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