CHINA’S ECONOMY CHALLENGES BRANDS, BUT OVERSEAS PRESENTS OPPORTUNITIESThe modest 3 percent increase in value for the banks category is a substantial improvement from the 16 percent decline a year ago. The fluctuation in value illustrates how closely Chinese banks are tied to the performance of the nation’s economy and the impact of government regulation.
The nine banks brands included in the BrandZTM Top 100 Most Valuable Chinese Brands 2016 comprise less than a fifth of the ranking’s value, down from 30 percent in 2014. This decline resulted in part from the rise of technology and e-commerce brands that account for an increasing share of BrandZ China Top 100 value.
The banks and technology categories are represented by three brands each in the China Top 10 in the 2016 ranking, compared with four bank brands and two technology brands a year ago, before smart phone maker Huawei, entered the BrandZTM China Top 100, at rank seven, and Bank of China dropped to number 11.
The technology brands challenge banks in particular, because of the growing popularity of mobile banking, including Internet peer-to-peer lending. Regulatory reforms to encourage more competition also continued to impact bank profitability. Banks are freer now than in the past to set interest rates o ered on deposits, for example.
Overseas business improved for some bank brands, however, as the International Monetary Fund added the Chinese renminbi as a key global currency, joining the dollar, euro, pound and yen. The government’s Belt and Road initiative to promote international trade also supported overseas Chinese banking activities.
The nine banks ranked in the BrandZTM China Top 100, in order of their brand value, are: ICBC, China Construction Bank, Agricultural Bank of China, Bank of China, China Merchants Bank, Bank of Communications, China Minsheng Bank, Industrial Bank and China Everbright Bank. All nine banks but one, China Minsheng Bank, are state owned.