The Bank of China: From a Turbulent Past to a Strategic Future – What Does Its Presence in Malaysia Show?

Abstract

Historically, the Bank of China (BOC) has shouldered responsibilities for the various governments of China. And recently, since Bank of China is in the strategic sector of China, it has assumed the policy responsibilities of the Chinese state such as “Going Out” strategy and Belt and Road Initiative. Most of BOC’s Malaysian business only deal with the home (China) country’s international business rather than the host (Malaysia) country’s local business. Albeit, the BOC has ventured into more local businesses than before, the BOC’s Malaysia’s China-related business is not only far more extensive but also more competitive than its local business activities. Although some efforts have been taken to strengthen its local business and to localise, the internationalisation of the BOC has focused most on the internationalisation of renminbi rather than the internationalisation of the bank/company. Hence, if localisation is viewed as one major method of internationalisation, then the BOC has yet to participate strongly in that activity. Consequently, the focus on home country’s favourable support is likely to make BOC less competitive internationally. Hence, we take the position that the BOC should focus strongly on localisation to gradually join the ranks of localised mainstream foreign banks to become more competitive.