General Environment Analysis for Hsbc in Mainland China Essay

Economy-We know the high speed of Chinas growing economy. With the development of the economy in China, Chinese customers consumption power has been going up. More people are accepting the consumption ways such as credit card and installment plan. -Not only individuals, small and medium sized enterprises play significant roles in Chinas economy. Since Chinas reform and open-door policy, huge amount of small and medium sized enterprises come out. They demand capital and it is relatively harder for them to get it so they rely more on swans.DemographyMiddle Class in China is growing and they own stronger purchase ability and at the same time they got the sense of investment.Political/ lawfulSince entering the WTO and in December 2006, China formally opened the banking industry to the world, which means that foreign banks are able to conduct RMB business in China. However, all move of the foreign banks are regulated by the China Banking Regulatory Commission. For example, the loan-to -deposit ratio must be strictly controlled within 75%. Therefore, how to satisfy this event and how to deal with the numerator and denominator are what HSBC needs to take into consideration.TechnologicalThe development of Internet has led to the prosperity of e-commerce. HSBC might consider cooperating with such related companies like near online stores and payment platforms to expand the retail business.GlobalThe destruction of the financial crisis on the global economy had in particular impact on the parent bank of HSBC, and this has inevitably affected the subsidiaries in China.SocioculturalTraditionally, Chinese people prefer saving than investing. As for investment, people prefer low-risk financial products. Low-risk with high-return investment products will be the one kind people pursue.