Zapotichna, R, Murshudli, F
Kitaêznavčì doslìdžennâ 2021, 2:41-51
Section: Political, Social and Economic Development of China
Language: English

Interest regarding Chinese cross-border banking activities has remained low among scholars, leaving this issue insufficiently studied in the economic literature. The fact that Chinese banks are the largest cross-border creditors for most emerging market and developing economies makes the study of Chinese banks overseas activities particularly relevant. The desire to delve deeper into this issue led to the choice of the topic of our study. In this paper, we study Chinese banks’ cross-border lending to the rest of the world over the past decade, taking into account the consequences of the pandemic. The paper in this context, provides a better understanding of what is driving the global banking business of Chinese banks, which has gone through a process of deep transformation over the period under analysis. We study the size, characteristics, determinants, and obstacles of Chinese banks’ overseas expansion, which are key for assessing potential risks and spillovers that could arise from crises in either borrower or lender countries, as well as the reasons behind the dominance of Chinese banks in the list of the largest world banks. Strong governmental support, Chinese market saturation, urgent need for natural resources were concluded to be the main determinants of Chinese banks’ overseas expansion. Based on the analysis of the existing scientific researches on this issue and collected data we tried to forecast the most likely scenario in Chinese cross-border lending after the pandemic. Despite the fact that during the last decade Chinese banks have been expanding abroad at great speed, our findings suggest that due to the consequences of the pandemic, Chinese banks are very likely to lose their leading position in global financial arena.

Keywords: China, cross-border lending, emerging markets, home country, pandemic

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