Sample Essay on Global Banks in the U.S and China

Global Banks in the U.S and China

The financial sector growth across the world is significant when considered through more than two years. In particular, the U.S.’s economy has persistently grown since the country recovered from the financial recession of 2008. This has come with changes, especially, in the foreign banking sector. The U.S. and China, like any other country, have experienced changes in various aspects of banking including culture, asset, revenue collection and hiring and promotion practices. Globalization has been the driver of various changes in the banking sector, resulting in diverse views concerning global banking institutions. For a customer, the global banking context in Chinese financial sector is more attractive compared to that in the U.S. This is due to the liberalization of the sector that is now more attractive than an American option.

Global Banking in the U.S

The U.S is considered to be the most powerful economy across the world and the banking sector has continued to grow through the years. Globalization having been a crucial factor in enhancing organizational banking since the number of foreign banks has increased in the country (Terrell & Key, n.d). Global banks such as JPMorgan Chase, Wells Fargo and HSBC Holdings PLC are holding significant parts of the financial markets economy in the country. The organizational practices in the global banks are also changing to meet the needs of international communities that banks serve (Houpt, 1999). For instance, the U.S. has changed to be more liberal and with a shorter power distance. As such, global banks in the country have to practice equality in hiring practicesand remuneration of workers, collaborative working environments.           In terms of assets, the global banking sector in the U.S. has changed through the years. The growth of assets in the sector has been significant, with the leading sources of assets and revenue being industrial and commercial loans. This has determined the rise of assets from a value of $ 4.2 billion in 1972 to that of $ 15.2 billion in the present days (Terrell & Key, n.d). The revenues associated with the sector have increased significantly as the popularity of foreign banks increases. Increasing interaction with customers has led to bigger deposits and better credit balances. This could be linked to the competitive advantages that most of the global banks in the U.S have over their local counterparts. Some of advantages include incremental derivatives and trade in the financial markets, increased inter-bank liabilities which enable the global banks in the U.S to handle aspects such as financial transfers. According to a study by Houpt (1999), the global banks in the U.S have undergone deregulation leading to greater technological gains and further increase in the organizational assets.

Despite the seemingly positive outlook of global banking in the U.S., entry into the industry is still limited by various factors. For instance, the banking sector in the U.S. has been deregulated, yet the federal government expects global banks operating in the U.S to adhere to certain conditions that may appear stringent to intending investors. Scott (2014) reports that companies willingto establish banking businesses in the U.S must have total banking assets, revenue and net income from banking activities which are greater than the totals from all other businesses. This may be difficult for smaller companies that are just growing to take their place in the economy. For job seekers, the global banks in the US offer an excellent equal opportunity employer. The hiring capacities of global banks in the US are expanding since the US has more opportunities than in the past years. The banks practice no discriminative hiring or promotion since the constitution of the U.S through the fourth amendment prohibits any form of discrimination. The recruitment and promotion practices are thus founded on merit. The salaries for the finance industry have also increased to an average of between $73,000 per annum for lower level employees to approximately $122,000 per annum for senior employees (Smith, 2012). Smith further argues that the yearly bonuses may at times supersede the amounts received as salaries.

Chinese Global Banking

As in the U.S., global banking has been increasing significantly in China, characterized by the growth of assets, cultural changes and variations in corporate cultures. In a report prepared by PwC (2013), the local government in China also provided opportunities for the involvement of global banks in the country. This has come with changes such that the banks come into the country under shorter approval procedures, yet still face stringent capital requirements. Being a collectivist society, most people in the foreign banking sector are also likely to hire the locals due to their imperative in influencing those of their societal associations (Li et al., 2015). China has been changing from the masculine societal culture towards a more feminine approach in the corporate sector. The hiring practices therefore tend to be aligned towards increasing the number of women in the work place. Promotion practices are as well adhered towards maintaining gender balance in the sector. According to a report by Michael Page (2017), bankers in China are paid attractive remunerations that increase per year at a rate which corresponds to the rate of inflation and bonuses of 6 – 10% of the total salary per year.

The growth in the foreign banking sector in China comes with other positive outcomes including participation in fixed income markets, enhanced derivatives, treasury activities across borders and investment banking. This may attract more potential investors and customers to the industry. The impact of these improvements is clear enough, especially through the increment of banking assets from 5823 RMB in 2004 to 23,804 RM in 2012 (PwC, 2013). This is also linked to increase in the number of firms in foreign banking within the same time period.


Based on the findings, it can be argued that investing in the Chinese banking segment could be more attractive than investing in than the U.S market. While it appears attractive due to the higher revenues and assets, the sector is insensitive to the market demands, especially due to the stringent entry requirements. For potential employees, China offers a good opportunity for women. On the other hand, the US, being an equal opportunity country and with merit based recruitment and promotion practices, can be an excellent choice. Moreover, the remuneration packages are also more attractive in the U.S due to the strength of the currency relative to the RMB.


Houpt, J.V. (1999). International Activities of U.S Banks and in U.S Banking Markets. Federal Reserve Bulletin.

Li, R., Li, X., Lei, W. & Huang, Y. (2015). Consequences of China’s Opening to Foreign Banks. In Song, L., Garnaut, R., Fang, C. and Johnstone, L. (Eds.) China’s Domestic Transformation in a Global Context. Canberra: The Australian National University Press.

Michael Page (2017). Hong Kong Salary and Employment Report. Michael Page Organization. Retrieved from

PwC. (2013).Foreign Banks in China. Price Water-house Coopers.

Scott, K. (2014). Non- U.S Banks Operating in the United States.Journal of Taxation and Regulation of Financial Institutions, 27(4).

Smith, J. (2012). The Banks that Pay their Employees the Most. Forbes magazine. Retrieved from

Terrell, H. & Key, S. (n.d). The Growth of Foreign Banking in the United States: An Analytical Survey.