| The reform of Foreign Investment Law is one of the most important contents of China’s opening up process in recent years.With the continuous advancement of the reform process,China has initially established a new legal structure of foreign investment,and with the establishment of this institutional framework,many previous institutions and regulatory systems involving foreign investment are also faced with the practical needs of comprehensive adjustment.With the establishment of this institutional framework,the system of many investment fields before also face the realistic demand of adjustment.Since the establishment of the Shanghai free trade zone in 2013 as a pilot field for financial liberalization,the opening up of the banking industry and the improvement of supporting systems have also begun to occupy the focus of China’s market opening and reform.Based on the realistic collision of these two institutional reform trends and from the perspective of the new institutional pattern established by the Foreign Investment Law,this paper makes a systematic and in-depth analysis and research on the construction of the opening system of China’s banking industry.The first chapter of this paper mainly discussed the new pattern of foreign investment system we build up recently,and clarified the logic relations between the reform of Foreign Investment Law and the opening up of our banking market,considering the foundation of China’s open banking system.The enact of Foreign Investment Law is an important milestone,and before which,the long used "Three Laws on Foreign Investment" have sowed the seeds of defects for the foreign banking industry in China due to their systematic chaos.The legal system of foreign bank supervision which has been used for a long time in China still has a series of problems,such as the lack of effectiveness,the scattered of supervision contents,the ambiguity of foreign investment entry principles,and the deficiency of relevant systems.For these reasons,foreign banks have not fared so well in China: First,the proportion of domestic and foreign capital structure is unbalanced;second,the geographical distribution of foreign banks is uneven;third,the banking sector has a single source of foreign capital;fourth,the gap in profitability between Chinese and foreign banks is widening;fifth,foreign banks are not competitive in traditional banking business.The promulgation and implementation of the new law have made reforms and adjustments that are more in line with the needs of the times in terms of legislative names,legislative objectives,management models,competition arrangements,intellectual property rights protection,and foreign investment service system.It is a major progress in the improvement of legislation in the field of foreign investment.However,while playing a role as a fundamental legislation,the Foreign Investment Law tends to regulate many specific contents in a macroscopic way,so there are still many contents to be further improved after its implementation.For example,the transition and cohesion from the old legal system,the clarity and refinement of specific rules and provisions,and the perfection of supporting systems,etc.Considering with this legislative adjustment,China’s banking industry has also encountered with both perfect opportunity and severe test during its open process.From the perspective of international experience,though the open up process can inject new blood into a country’s banking market and stimulate benign competitions,sound access and regulatory systems are also essential.At the same time,the cases of countries which were failed to open up their banking sector safely have also showed the importance of establishing effective competition institutional arrangements and systematic national financial security review systems.The reformed 《 Foreign Investment Law》 has precisely made higher demands in these areas: One is to point out the perfect direction for the admittance system of China’s banking industry through the "pre-establishment national treatment" system;the second is to challenge the foreign capital management mode in China’s banking industry opening by promoting the reform of "negative list" management mode;thirdly,based on the universal application of the principle of neutrality of competition,it puts forward the requirements for the improvement of the competition system in China’s banking industry;fourth,the arrangement of constructing the national security review system was put forward at a higher level of legislation,which promoted the process of China’s financial security review system.In view of this,the following four chapters made a deep study on the way to improve and implement the relevant systems,based on the four requirements of the Foreign Investment Law on the opening of the banking industry.National treatment and banking access system are the research emphasis of the second chapter.Consider to the application of Foreign Investment Law in the banking industry,the primary problem lies in access,while the application of access system lies in the implementation of national treatment.The market access of capital banks mainly includes two aspects: Institutional and personnel access,and business access.It is a common practice for countries to set different barriers for entry in these two aspects,and the usage of national treatment is the most important criterion to determine the differences between the barriers.Divided by different application stages in access process,national treatment is usually known as two mode: "pre-establishment national treatment" and "post-access national treatment".For a long time,under the WTO system,China has applied "post-access national treatment" to the banking industry,both in terms of international commitments and domestic legislation.By analyzing the essence of the system,we can see that this is an "incomplete" national treatment.Basically,the reasons for the "incomplete" national treatment of China’s banking industry lie in the defects of the normative system under the dual-track management mode in China,the imperfection of the specific system contents,the low level of supervision of bank regulators and the cognitive limitations in the period of economic backwardness.Although the Foreign Investment Law has put forward the requirement of establishing the system of "pre-establishment national treatment" from the top design,the application of it is still limited both temporally and geographically,cause the practice of this principle were mostly completed within the area of free trade zone by a very short period.Therefore,in exploring the comprehensive application of "pre-establishment national treatment" in the banking industry,we should analyze advanced experiences of national treatment system from different countries,and summarize their designs in the categories of access restrictions,their means of restraint,risk prevention measures and so on.In conclusion,these positive experiences are mainly embodied in the following aspects in China’s institutionalized path: First,improving the market access system for foreign banks and simplifying the access procedures.To realize the change from shareholder qualification restriction to business behavior restriction,from "rigid" access restriction to "flexible" access restriction,and on this basis adhere to the "legal-oriented" institutional classification access.Second,properly regulate and exercise prudent supervision.On the premise of meeting WTO commitments on opening up,China should improve the review of supervision and make it an effective supplement to "pre-establishment national treatment".The third is to establish necessary mechanisms to prevent market access risks,such as adopting "threshold restrictions",preserving the discretion of local governments,and setting up exceptions to national treatment(negative list)for market access,so as to prevent disorders in the banking sector.The third chapter mainly studies the challenge of the negative list management mode to the supervision system of foreign banks in China.As a necessary limitation of national treatment,the negative list has an important impact on the functions of China’s banking supervision departments not only in terms of the access policy,but also in terms of their management philosophy.In terms of the formal characteristics,negative lists can be generally divided into three categories: uniform lists in the sense of domestic law,non-conforming measures in the sense of international agreements,and "quasi-negative lists" scattered in various norms.The specific governance logics of foreign capital management mode are varying from different negative list types;thus,it can be seen after sorting out the exploration process of the foreign bank’s negative list under the influence of different governance logics that there are still many deficiencies in any type of negative list in China,which may cause high risks during the opening up of banking sector,under the background of deepening reform led by the Foreign Investment Law.First,the concept of "decentralization" embodied in the negative list mode challenges the establishment of the list itself.Secondly,the concept of "decentralization" is accompanied by the transformation of the banking supervision system from the examination and approval system to the approval record system,which challenges the regulatory authorities to effectively prevent market risks,maintain the competitive order and stabilize the market after decentralization.Finally,as the concentrated embodiment of the autonomy of private law,the negative list enables foreign banks to obtain more autonomy space after the opening up,which challenges China’s banking supervision system when clarifying the boundary between administrative control and foreign banks’ autonomy.In order to cope with the challenges,China’s banking supervision system can be improved from the following aspects: First,is to promote the process of establishing foreign banks’ negative list in all three different types,so as to lay a more systematic and comprehensive foundation for the future management of the list while dealing with the challenges of "ratchet effect" and the demand of institutional transparency.Secondly,is to strengthen the supervision system of foreign banks,and turns its focus from prior approval to post –filing.Meanwhile,construction of both the early warning mechanism of problem banks and deposit insurance system are also needed continuously to enable the orderly withdrawal of high-risk problem banks.Thirdly,is to change the supervision mode from subject control into behavior control as well as from pre-intervention into post-supervision,and improve the construction of relief mechanism of foreign banks,on the basis of understanding that the effects of negative list have two sides as to the foreign banks’ private autonomy.The fourth chapter mainly focuses on the influence of the principle of competition neutrality on the competitive system arrangement of China’s banking industry.The principle of competitive neutrality has been popularized in more and more countries in the development process from the domestic competition system of Australia to the international competition system led by the United States.The changes it entails are both an opportunity and a challenge for China.One of the challenges lies in how to deal with the relationship between the principle of neutrality of competition and China’s market economy with public ownership as the main body.The second challenge is how to deal with the relationship between the principle of competition neutrality and the arrangement of industrial policy-driven investment competition.The third challenge is how to refine the concept of competitive neutrality from a principle to a complete system and implement it.The fourth challenge is how to deal with the direct impact of the principle of competition neutrality on the "going global" of Chinese banks and the "coming in" of foreign banks.The fifth challenge lies in how to accelerate the integration between the domestic competition system and the mainstream international competition neutral rules.Through the institutional comparison and reference of international banking competition arrangement in section 2 and section 3,as well as the detailed arrangement of China’s banking competition system,this chapter finally focuses on discussing the application concerns of the principle of competition neutrality in China’s banking opening and the corresponding institutionalized path.First,considering the competition neutrality to open China’s banking industry brings many positive effects,such as to realize the diversification of competition and promote the competition mechanism to further improve and enhance attraction of foreign capital bank and the competitiveness of the bank of "going out",etc.,determine the necessity of the competition shall be applicable to the neutral principle in our country banking.Secondly,some scholars in China proposed the concept of "pseudo-competitive neutrality" based on the negative impact of competitive neutrality on the opening of China’s banking industry.At the end of the fourth section of this chapter,through a critical analysis of the American principle of competitive neutrality and "pseudo-competitive neutrality",this article will explore institutional suggestions for optimizing the competitive arrangement of China’s banking industry,including establishing the concept and role of competitive neutrality in banking legislation;optimizing the competitive environment after the opening of the banking market;improving the mechanism for handling competition complaints.The fifth chapter focuses on the opening of the banking industry and the perfection of the national financial security review system.China’s understanding of the concept of national security is constantly changing and adjusting with the change of the main social contradiction in different periods.As an important factor directly affecting national stability and international competitive strength in recent years,financial security has also received more and more attention in the construction of national security review system.It can be seen from the experience and lessons of international banking liberalization that,without a financial security system,opening up the banking market rashly may not guarantee the stability of market operation even with a sound access and banking supervision system.At present,the United States,Australia and Japan have relatively sound national security review system,through the selective analysis and reference of these systems,we can improve China’s national financial security review system from the following aspects: First,is to enhance the effectiveness of the security review system;second,is to improve the object of the security review system;the third is to clarify and refine the safety review standards;the fourth is to speed up the establishment of security review institutions,and clarify the allocation of authority and internal functions;the fifth is to improve the mechanisms for review,supervision and judicial relief.Based on the discussion of the above four parts,this paper holds that the final implementation effect of the reform of foreign investment law reflected in the process of opening up the banking industry mainly depends on the response of relevant systems in the above four legal system dimensions.Only by perfecting and reconstructing the access system of foreign Banks,supervision system of foreign Banks,competition system of the banking industry and national financial security review system can a complete set of safe and efficient investment opening system of the banking industry be established. |
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