<p align="justify">Bank of communication is based in China and it was incorporated in 1908. The bank is the fifth rank among all banks in the Chinese banking industry. The bank offers commercial and retail banking services and products to the market of China. ; ; The company offers several service and products that mainly includes fixed and current deposits, quasi-credit, education-based savings program, and different types of loans for housing, education, and cars (Bloomberg, 2019). The bank is successful due to its vast product offerings but it is highly suggested to conduct a thorough industry analysis to continuously grow and prosper in the industry. Porter&#8217;s five forces model is used to analyze the banking industry of China to provide useful insights for Bank of Communications regarding the Chinese banking Industry.
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<h2 align="justify">Competition in the Chinese Banking Sector</h2>
<p align="justify">The competitive rivalry in the banking sector is on the rise due to the continuous growth of the banking demand. ; There are many large local banks providing valuable services at competitive rates. The foreign banks are discouraged to enter the market and the government devises policies that support the operations of local Chinese banks. This provides a positive aspect to the local banks but the presence of more than 3500 Chinese banks increase the level of competition in the market. The competition is intense among five major competitors of the industry that includes Bank of communications, Agriculture Bank of China, Bank of China, Commercial Bank of China and China Construction bank with a massive share of 35.5% (Statista, 2015). The total assets of the Chinese banking industry are worth 254.3 trillion yuan in 2018 (Xinhua, 2018). The lack of promotion of foreign banks does provide an advantage but the local banks provide serious competition to each other. Keeping in view the overall condition, the competitive rivalry is the banking sector of China is moderate. 
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<h2 align="justify">Threat of Substitutes</h2>
<p align="justify">There is no possible substitute in the near future that has the potential to replace the banking industry and its services. The banking industry is the core service for every business and household in this modern era. The services and products of the banking industry are revolutionized with an exceptional level of creativity and value-added services but no product or service was able to become a threat for banking products and service (McWaters et al, 2015). Thus, the threat of substitutes for the banking industry of China is low. 
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<h2 align="justify">The Threat of New Entrants</h2>
<p align="justify">The high number of hurdles for entering a particular industry decreases the likelihood of new entrants. The banking industry of China poses several hurdles to new entrants despite growing demand. The banking industry requires massive capital to set up a business and operates properly. This also requires a high level of expertise and compliance with the strict regulations for banking and financial business in the country. The switching cost of the customer is low due to the inability of banks to provide completely different products. The customers are reluctant to go to a new bank as the banking service is a high involvement decision. All of these hurdles make it difficult for new entrants to set up business in the industry (BSA, 2017). ; Therefore, the threat of new entrants is low.
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<h2 align="justify">Bargaining Power of Buyers</h2>
<p align="justify">The bargaining power of buyers in the Chinese banking sector is high as there are more than 3500 options for buyers of banking products and services. The lack of significant innovation between the offerings of banks is another factor that decreases the switching cost and increases the bargaining power of the buyer. These two factors contribute to strengthening the dominant position of buyers to negotiate and bargain the terms in their favor (Clemes et al, 2010).
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<h2 align="justify">Bargaining Power of Suppliers</h2>
<p align="justify">Customers&#8217; deposits, state banks, and other financial intuitions are the major suppliers along with banking experts. Customers know the significance of their deposits and already enjoying the high bargaining power. The financial intuitions that lend money are also not available in abundance that strengthens their power to bargain with banks. The supply of banking experts in China is sufficient but that is not as important as the customers&#8217; deposits and financial institutions&#8217; are. Therefore, the bargaining power of the supplier in the Chinese banking sector is high due to the dominant position of customers and financial institutions.</p>
<h2 align="justify">References </h2>
<p align="left">BSA. (2017).Review Of Barriers to Entry, Expansion, and Exit in Retail Banking. Available at: <a href="https://www.bsa.org.uk/BSA/files/97/97d78dbb-e8aa-4f8c-8b26-8c7ea7d95ce9.pdf">https://www.bsa.org.uk/BSA/files/97/97d78dbb-e8aa-4f8c-8b26-8c7ea7d95ce9.pdf</a><br />
Bloomberg. (2019). Company Overview of Bank of Communications Co., Ltd. Available at <a href="https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=5870494">https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=5870494</a><br />
Clemes, M. D., Gan, C., &; Zhang, D. (2010). Customer switching behavior in the Chinese retail banking industry. International Journal of Bank Marketing, 28(7), 519-546.<br />
McWaters, J., Bruno, G., Lee, A., &; Blake, M. (2015). The Future of Financial Services-How disruptive innovations is reshaping the way financial services are structured, provisioned and consumed. In the World Economic Forum. Junio de (Vol. 2105).<br />
Statista. (2015). Banking Industry in China- Statistics and Facts. Available at: <a href="https://www.statista.com/topics/1552/banks-in-china/">https://www.statista.com/topics/1552/banks-in-china/</a><br />
Xinhua. (2018). China banking sector’s assets up 7.5%. CHINADAILY. Available at: <a href="http://www.chinadaily.com.cn/a/201808/27/WS5b83e160a310add14f38804c.html">http://www.chinadaily.com.cn/a/201808/27/WS5b83e160a310add14f38804c.html</a></p>