IT/IS Development in China's Banking Industry: The WTO Challenge and IS Strategies

The political and economic environment during the 80’s coupled with the lacking of reliable network backbone and the inefficient and ineffective telecommunication infrastructure in the 90’s had resulted in banks in China adopting de-centralized approach in their computerization programs. China officially became a member of WTO in November 2001, and by the beginning of 2007, Renminbi (China’s currency unit, denoted as RMB, currently at about 8.28 units against one US$) banking businesses will have to be opened to all foreign banks. Today, market trend in the world is ‘size matters’, and the old saying of ‘small is beauty’ although still applicable in certain business sector, unfortunately is no longer true in the banking industry. In this regard, the giant Chinese banks are racing for the “consolidation and centralization” of their IT infrastructure and IS operations. The authors try to give an account of the background, the rush, the challenges and the deadline facing them. The crux of the matters is that it is not a technical problem alone. The unique nature of the problem traced back to the political, social, behavioral and environmental structure. The authors also try to analyze the approaches being taken, its progresses so far and its impacts on the banking industry in China, and perhaps elsewhere. With the WTO entry and further liberalization of the Chinese banking industry, what can we expect next and what are the strategies for these banks and the new comers, both local and foreign? The paper will try to throw in some light.