This chapter analyses the key issues affecting foreign market entry into China’s banking sector with particular references to the Chinese government’s aim to promote economic development in the country’s western region. It argues that a more rapid process of liberalization for market entry by foreign banks will contribute to developing the region. It examines how entry of foreign banks in the country’s western region can impact positively on the inflows of foreign direct investment into the region while injecting a much needed impetus for transforming the financial sector through raising the level of competition and transfer of skills and technology.