RBS has taken this formidable step as many international banks are focusing on Chinese security market for growth. RBS’ is entering the Chinese banking sector with a vision to bring European, US and British companies to China, and allow the investors to gain access to equities and debt of the foreign companies (ICFAI. 2011).
China’s entry into World Trade Organization (WTO) in the year 2001 has raised the entry barrier of the overseas investors leading to a flow of investment in the securities and financial market of the country. The banks in China have to operate using the global operating standard in terms of accounting and corporate governance reforms. The large commercial banks like RBS need to follow an increased disclosure requirement in the auditing standard in order to be able to list in public. Recently, riots in China have created an unstable political condition. This has led to foreign companies becoming apprehensive about investing. However, strict measures have been adopted by Chinese Government to restore a safe environment for the investors in the country.
The Chinese economy which was reformed and was transformed into a market oriented one since 1978. This economic reform has helped in promoting an environment which has positively affected the individual initiatives and entrepreneurship. The economic condition of China has reduced poverty and has boosted the per capita income of the people to the highest level (Kuijs, 2012). In 2010 China was ranked as the country having second largest economy in the world. For the past 26 years the average economic growth has been sustained at the rate of 9.5% indicating the economy of the country is on rise (Davila, n.d.). The higher economic growth and the national income reflect the feasibility which RBS is seeking in the country for expansion. The country’s present banking industry is worth 14 thousand billion in assets. The following graphs show the GDP growth in China and how the ...Show more