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mple economic model which has described the FDI, the deterministic chaos can be controlled. The delay time and feedback strength can decide the chaos control.Through using the Pyragas’ method, they built a system which can judge in the real economical systems whether the present control method is feasible for practical application.It is reasonable to consider the control force as the government’s intervention force. In other words, they can treat the intervention force of the government on the FDI as all the control term for the practical application.If they want to attract more FDI and make full use of them, the following actions should be taken into account: taking investment incentives (financial incentives and fiscal incentives), opening policy, limiting inflation, sustaining stable economic growth, strengthening their protection towards intellectual property rights, improving competitiveness, making the economic reforms further deepening, overcoming the phenomenon of bureaucratic corruption, enhancing hard budget constraints and so on. Of these factors, striking bureaucratic corruption and making the economic reform further deepening are especially important.

In summary, although different researchers have analyzed the problem from different aspect, they all put forward their attitude toward the FDI and its influence toward the China’s banking market structure.Most researchers support the point that entrance of foreign bank makes the local banking industry more efficient and competitive in China.On the other side, Chinese authorities can deal with the FDI chaos through intervention on the system or exerting an additional force on the system.When considering the fee-based business in bank, the international expertise and experience in the foreign bank can promise benefits for China’s banks that are relatively inexperienced. 

CHAPTER 3

CONCEPTUAL FRAMEWORK

Chapter 3 – Conceptual framework

3.1 Hypotheses

According to the object of the research, it can construct hypotheses on the relationship between the foreign banks’ presence and the local banking’s performance, which can be measured by three indexes – cost, noninterest income and net interest margin. Different from previous researches, foreign bank presence in this study is measured to determine the domestic banks’ actual level of exposure to the influence of foreign bank entry and their presence.

3.1.1 Net interest margins (NIMs)

NIMs are usually expressed as the interest incomes minus the interest paid on borrowed funds divided by total earning assets. If the foreign bank presence increases, the net interest margins are expected to be reduced.Because the domestic banks’ competitive pressure. For domestic banks, in order to keep their market shares, they would respond by increasing deposit interest rates or lowering lending rates or both. In that way, it will increase the local banking industry’s competitiveness and narrow interest margins.In the case of China, it is a reasonable hypothesis. Although the interest rates are maneuvered by government, banks have the right to set up their own structures in interest rate. Therefore, banks use various structures in interest rate to account for changes in the banking i本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。