## Banking Across Borders: Are Chinese Banks Different?

_IMF Working Papers, November 13, 2020_

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## Bibliographic details
- Authors: Eugenio M Cerutti, Catherine Koch, Swapan-Kumar Pradhan
- Published: November 13, 2020
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513561226.001

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### Overview and research question
- Authors: Eugenio M Cerutti, Catherine Koch, Swapan-Kumar Pradhan
- Publication date: November 13, 2020
- Central question: How does the global footprint and cross-border lending behavior of Chinese banks compare with that of other bank nationalities?

### Key findings
- Chinese banks have become the largest cross-border creditors for almost half of all emerging market and developing economies (EMDEs).
- The global reach of Chinese banks resembles that of banks from advanced economies (AEs).
- International banks, and Chinese banks in particular, grant a substantial share of their cross-border loans from affiliates located abroad; this motivates the study’s nationality approach.
- Using a gravity model with a novel measure of distance that captures the role of foreign affiliates across all bank nationalities:
  - Larger distances deter cross-border bank lending to EMDEs more than to AEs.
  - For Chinese banks, distance deters lending to EMDEs less than for peer EMDE banks.
- Correlates of bilateral lending:
  - For all banks combined, bilateral economic interactions—trade, FDI and portfolio investment—positively correlate with lending.
  - Chinese banks’ lending to EMDEs strongly correlates with trade.
  - Chinese banks’ lending to EMDEs does not correlate with FDI.
  - Unlike other banks, Chinese banks’ lending correlates negatively with portfolio investment.

### Methodology highlights
- Empirical approach: gravity model.
- Novelty: a new measure of distance designed to capture the role of foreign affiliates across bank nationalities (used to assess how distance affects cross-border bank lending).

### Subject coverage and keywords
- Subject areas: Balance of payments, Bank credit, Cross-border banking, Financial institutions, Financial services, Foreign banks, Foreign direct investment, Money, Portfolio investment
- Keywords: Bank credit; bank lending; borrower country; Chinese bank; Chinese banks; Cross-border banking; cross-border lending; EMDE borrower; FDI; Foreign banks; Foreign direct investment; Global; Gravity model; lending bank; parent country; portfolio investment; Portfolio investment; Trade; U.S. dollar; WP

### Publication metadata and key statistics
- Series: Working Paper No. 2020/249
- Issue: 249
- Volume: 2020
- Pages: 47
- DOI: https://doi.org/10.5089/9781513561226.001
- Stock No: WPIEA2020249
- ISBN: 9781513561226
- ISSN: 1018-5941
- Preview citation (format: Chicago) on page: Eugenio M Cerutti, Catherine Koch, and Swapan-Kumar Pradhan. "Banking Across Borders: Are Chinese Banks Different?", IMF Working Papers 2020, 249 (2020), accessed 9/9/2026, https://doi.org/10.5089/9781513561226.001

*IMF Working Paper No. 2020/249 (November 13, 2020) — summary based on the page “Banking Across Borders: Are Chinese Banks Different?”*

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_Source: https://www.imf.org/en/publications/wp/issues/2020/11/13/banking-across-borders-are-chinese-banks-different-49785_