What Does a Model Transition Mean for Chinese Banks?


The phrase “model transition” (转型) has been touted with increasing frequency  by the banking sector, appearing on dozens of occasions in each of the annual reports just released by listed lenders for 2016.

Members of the banking sector believe that a transition to a “lighter” model of operation is imperative given China’s changing economic environment, with key challenges including lacklustre profit growth, transitions in development models, sharpening of external shocks and increasingly strict government regulation.