The Influence Of Foreign Banks' Entry On The Performance Of China's Banking Industry

In 1979,the establishment of the Mainland Representative Office in Japan was the starting point for China's financial industry to open up to each other.In 2006,China fulfilled its promise to join the WTO.In the face of foreign banks opening up the domestic banking market,competition between Chinese and foreign banks was launched in all fields.In the 40 years of the opening of China's banking industry,foreign banks have developed rapidly in China,which has become an indispensable part of the Chinese banking industry and even the financial industry.The entry of foreign banks into China has always been the focus of the government and the public.It is also a hot topic in the academic and practical circles.However,what impact does the entry of foreign banks bring to China's banking performance?The entry of foreign banks,on the one hand,can improve the performance level of the host country's silver industry through "competitive effect" and "spillover effect".On the other hand,it can also impact the customer market and financial stability of the host bank through the "cherry picking" behavior.At this stage,China is in a new normal economic situation.It is of great practical significance to study this issue again.This paper selects 16 commercial banks in China for 2005-2016 years' operating data,and studies the impact of foreign banks' entry on Chinese banking performance from three aspects of cost,profitability and income.The results of data processing and Granger causality test are concluded through Eviews.The cost of Chinese banking will be increased in the short term,but in the long run,the cost will be reduced as the cycle of technology is shortened,which will eventually reduce the operating cost of China's banking industry.In terms of profitability,after the entry of foreign banks into China,the profitability of China's banking sector has been enhanced through the "demonstration effect" and the "technology spillover" effect.In terms of income,foreign banks have limited impact on the traditional banking business in China,and have a great impact on the income of intermediate business.Intermediate business will become a new growth point for the growth of Chinese banking business income.Finally,according to the results of the experiment and the actual situation in China,we put forward the positive effect of introducing foreign banks into full play to enhance the profitability of the Chinese banking industry by further opening up and introducing foreign banks to play an effective role in promoting the profitability of the Chinese banking industry,leading them to play the competitive effect on the traditional business,and at the same time,it is beneficial to the equipment and technology in the early stage.The investment of the operation and manpower is converted into income,the intermediary business can reduce the loss of high quality customers,and better deal with the challenges brought by foreign banks.In addition,the banking industry should pay attention to its own operating conditions,strengthen the internal risk control and the disposal of non-performing loans,and strive to improve the quality of the assets.Finally,the banking industry should actively adapt to the new normal economy,with the help of the power of financial science and technology to better highlight its own advantages,through large data wind control and precision marketing to resolve the pain point of traditional banking,to achieve the common development of online and offline,reduce costs,improve operation efficiency.