The Comparative Study On Competition Between China And Foreign Commercial Banks

As the financial market become more and more internationalized under thewave of globalization, China's financial industry now is confronting theunquestionable and huge change, and the commercial bank industry is certainly thefirst one confronting the challenges during this process. After China entered intoWTO and so many foreign commercial banks came into China, how to find out thebig gap between China and foreign commercial banks and increase the competitionof China's commercial banks will be the imperious problem.This paper studies the China and foreign commercial banks competition bycomparison analysis and case study, and provides the suitable policies to copy withthe competition pressure and enhance China's commercial banks competition.Chapter 1 of this paper provides a general picture of China commercial banks'dilemma, and illustrates the noticeable problems and the impaction with the entryinto WTO.Chapter 2 compares, theoretically and empirically, two different types ofcommercial banks and illustrates the moment situations and future challenges.Foreign commercial banks now are on the stage of diversity of operation,internationalization of industry, diversity of competition and more and moreinnovation.Chapter 3 mainly analyzes the problems that China commercial banksmaintain. China commercial banks consist of four state-owned commercial banks,share-holding enterprises (including 10 share-holding enterprises, Yantai householding bank, and Bangbu house holding bank), and 90 city commercial banks. Themain problems existed including the monotonous financial products, smallproducts difference, similar distributing network, and slow development ofpersonal bank service, limited development of mid service, low capability ofsupervises, low quality of assets, limited capacity of financial innovation, andunsuitable income structure. As the financial market become more and more open,and the market competition will inevitable increase, China's commercial banks willmainly confront followed challenges: the role of bank intermediary will die away,the challenge of new economy and new technology bring to the operation modeland bank organization and manager, contest of excellent customers sources andtalents, service and products competition and markets. Chapter 4 mainly devotes systematic analysis for the competition of China andforeign commercial banks by index methods, such as liquidity, profits, capital riskprevention, and bank scale and company culture. Especially, this chapter analyzesthe corporate governance structure. And among the so many facts affecting theefficiency of commercial bank operation, the corporate governance structure is oneof the crucial facts. There are two typical governance structure models in the world,one is market-oriented, the other is command-oriented, the former mainly comesfrom British and U.S.A, and the latter mainly rests on German and Japan. And theone collusion is that the success of foreign bank operation will promote someuseful experiences to the development of China's commercial banks. The last chapter summarizes the experiences and provides some routes toamplify China's commercial bank competition: First, reforming the government supervise and establishing integratedcommercial bank governance supervise institution and system including newemerging share holding commercial banks. And use the foreign bank successfulregulation experiences, achieving normalization of commercial bank supervise,strengthening unity and manipulation of supervise rules, promoting thenormalization and science of supervise methods by specific and definite quantityanalysis. However, this paper notices that we should abandon single bureaucracymanagement, adopt more and more economy means and law means, and establishbank deposit insurance institutions. Second, reforming commercial bank governance supervises structure, andadjusting and optimizing share option structure. We should protect the shareholdings'interest, optimize directory structure, and truly utilize themaking-decision role of directory so that strength the ratio of independence directorin the directory. The other way could be used in the operation is that establishing...