The purpose of this paper is to understand the market entry dynamics of foreign banks in China.
The paper employs multi‐method approaches combining both questionnaires survey data and qualitative interviews. Also, integration of internalization theory (at the macro level) and strategy literature (at firm level).
The paper clarifies why and how foreign banks enter the Chinese market, and strategies adopted to cope with local market dynamics; also, the paper identifies major trends and key competitive advantages of foreign banks.
Major advantages and weaknesses have been identified, which will help foreign entrants to make greater inroads into the domestic banking market. The paper shows how to manage risks and make governance structure more efficient and transparent, which are urgent tasks for policy makers.
The paper utilizes the first nation‐based dataset to investigate the Chinese market, and offers practical implications for local regulators and policy makers and bankers.
