Explore The Comprehensive Competitiveness Of China's Banking Sector

Since Chinese entry into WTO on the Dec, 11, it is only three years away from China's general open of financial market .In the past two years, foreign finance institutions have aggressively completed with those of China for expanding Chinese market. During the game, foreign banks obviously dominate over Chinese .According to the theory of "diamond model", presented by Porter, the professor of USA Harvard University, a nation's general competition mainly depends on the third industry .However ,there are four factors affecting industry's competition, such as natural factor, demand condition, relevant and supporting industry, unit firm's strategy. As one of the most important third industries, financial industry's development is directly concerned with one country's domestic finance stability and status in international finance market. Combined with our country's present finance condition, the main factor affecting banks' efficiency is system, including department system, operation system, supervision system and so on. The article compares Chinese with foreign banks on the basis of Professor Porter' diamond model through erecting bank's competition index system and explains bank's appropriate systems' importance to Chinese finance industry. After analyzing the defect of present China's banks system, the author gives some related suggestion. However, as for limitation of knowledge, the suggestion is just for reference.