Research About Impact Of Banking Opening-up On Commercial Banks’ Efficiency In China

In Dec.1979, Export Import Bank of Japan set up a representative office inChina, which initiated the external liberalization of banking sector afterChina’s reform and opening up policy. In the end of2011, China entered theWTO and promised to liberalize its banking industry completely within fiveyears. In2006, with the implementation of Regulations of the People’sRepublic of China on the Administration of Foreign-invested Banks, China’sbanking industry entered into a period of overall external liberalization. After10years’ entry into the World Trade Organization, especially after5years’overall external liberalization of its banking industry, fundamental changestook place in both system and mechanism in China’s commercial banks, whichachieved historically span, but at the same time they were also facing severechallenges and enormous pressures. As the further external liberalization ofbanking sector, our commercial banks will be impacted more than before.Therefore, doing research on the influence of commercial banks, whichresulted by the external liberalization of banking sector, has a very importantsignificance.Firstly, this thesis applies factor analysis to improve DEA method,working out a measuring method which integrates both factor analysis andDEA, it measures the efficiency of14representative commercial banks inChina and divides the banking samples into large-scale commercial banks andjoint-equity banks, the process of banking sector’s external liberalizationincludes three steps, describes their efficiency changes horizontally andvertically during the external liberalization period. Then through measurementmodel including dummy variables, further investigates on the influence ofcommercial banks’ traditional business, nontraditional business, operatingcost, and profitability, which are resulted by external liberalization of bankingsector. The research says obvious differences appear on the specific aspectsand effective degrees between large-scale commercial banks and joint-equity banks. Finally, based on theoretical analysis and empirical research, the thesisproposes some suggestions to rationally push external liberalization anddevelopment from the point view of macro structure and banking industry.