Nowadays, the banking industry in North American is facing severe competition and slow growth due to deceleration of population growth. China, in contrast, has a younger and faster growing population; hence, more and more foreign banks are attempting to invest in the Chinese banking industry. However, due to the high barrier of entry imposed by the Chinese government, at the end of 2003, only $500USD millions of foreign equity had been infused in China's banking industry. This represents only 0.3% of the total market. Nevertheless, by the end of 2006, China will open up its banking industry for foreign investors ("Foreign"). China will reduce the time limit for foreign institutions to open a new branch, lower the required capital investment, and authorized foreign banks to operate Chinese currency. It is a good opportunity for foreign banks to pour their investments into China ("Regulation").
In order to capture this opportunity, foreigners must plan ahead before opening a subsidiary in China.
Having a business in foreign country will have an impact on the HR operation. This research project focuses on two HR elements: recruitment and selection tools. The report begins with an overview of foreign banking institutions in China, and briefly discusses where banking institutions are concentrated. Furthermore, this paper also discusses what the employment restrictions are for foreign banking institutions. Most importantly, report touches on how Chinese banking institution select and recruit their applicants, and what selection tools they use, and finally, what are the implications for the HR department of a foreign bank.
2.0. Overview of Foreign financial institutions in China
At the end of 2001, there were 162 foreign financial institutions in China, among which 6 of those were solely foreign-owned institutions. 1 of the 162 was a foreign-invested bank, 7 were joint venture banks, 131 were...