Discussions On Problems And Solutions To China's Banking Industry

At present, Chin&s financial industry including Banking, Security, Insurance, Trust and Financial Company etc., operate individually, which is different from that in western developed countries. Hereby, we will discuss some issues existing in China's financial mdustn-. mainly in banking, such as how to get something beneficial from the experience and lessons of foreign and domestic financial industiy, improve the operations quality, avoid kinds of risks and increase the profits. The purpose of China's monetary policy is to keep our money generally steady and promote national economy's development Keeping our money steady means: first, Renminbi's foreign exchange rate steady; second, domestic price level keep steady. According to present situation, though Renminbi's foreign exchange rate is steady, society's retail price level had kept 24 month's negative increase until Oct. 1999, which has led to many unfavorable influences to national economy's development, residents lives and enterprises operation. So to reach the purpose of monetary policy, more active measures should be taken. Our commercial banks face kinds of financial risks and potential harms rising from the risks, which include bad credit, financial liability's non-smooth circus, illegal market, too many non- financial institute's existing, irregularity operation of interest and foreign exchange rate. Besides taking reasonable monetary policy, the commercial banks should be familiar with the features and take necessary refonns and make innovations. Since our economical system reforms develop further and society's products change according to market demand, China's banking reform faces three big problems: financial, operational and structural problem, which will put our banks, especially state-owned commercial banks into an unfavorable situation, when entering WTO and competing with the foreign banks. At the same time, operation model and management system will obstruct the state-owned commercial bank's development seriously. We can learn lots of experience and lessons from the financial crisis of South East Asian countries in 1997. After all, sooner or later, we'l l open our domestic financial market, our Central Bank should make preparation for the compact of int'l speculative capital. And also, we should pay attention to Japan's financial system, which has helped Japan's economy strong again effectively after World War II. Further, America's banking operation is a trend of world bank's operation. Since l990s, int'l financial market has taken on a new look: Firstly, private capital becomes most important in int'l capital fluid. Secondly, financial operation?s unity goes more rapidly. Thirdly. the scale and quantity of bank's combination keep increasing Fourtlily, NET and comprehensive services are universally supplied by multi-countries banks. Fifthly, different counttfs financial system becomes identical. Facing new trend and feature of int'l financial market and entry to WTO, where will our bank go and how to adjust our direction and operation to the chance and challenge Our operation model, our management system, our financial supervision and so on are all needed to reform. Postgraduate: Chen Aiying Supervisor: Prof. Li Youhua Major: Agricultural Economic Management...