The Promotion Of State-Owned Commercial Banks' Competitive Power And Innovation Of Their Management System In Early 21 Century

China's banking , especially the four state owned commercial banks, will be confronted with a keen competition after China entering into the WTO. In the long run. there is still an obvious gap between China's state owned commercial banks and foreign banks. But maybe in the short-term or mid-term run, China's banking will gain more from joining in WTO. the cost will be more than profits. Therefore, it is an important issue for China's banking to make full use of advantages and bypass the disadvantages. To ensure Chinese banks health and strong in the fierce competition, correct strategy and tactics should be made. We should make full use of the transition period of the five short and precious years to speed up the reforming of state owned commercial banks' system, to accelerate the pace of self-remolding, to gradually improve the operation environment and enhance supervision on foreign banks.This paper consists of three parts. Part One expounds some of the theories of banking competition, including the theory of scale economy and the theory of economy of system. Part Two looks back the history of the competition and reform of china's banking briefly, makes a comparison of competitive power between china" state owned commercial banks and foreign banks, analyses the deep reasons at the level of management system, which lower the competitive power of state owned commercial banks. The major problems of their inner management system are as the following: (1) the obscure system of property right makes them lake of the motive to seek for profits;(2) their organic system, which corresponds to the administrative system, distorts the rule of economic efficiency ;(3) the bureaucratization of their personnel system does not benefit the employment and development of the talented persons ;(4)the risk management system hasn't been put into effect ,leading to enormous risk for these banks;(5)the fiscal policy has transferred financial risk to the state owned banks;(6)the unfair tax policy makes their burden heavier. The key to the settlement of the above problems and theimprovement of their competitive power lies in the innovation of system.As for their own system, the innovation includes the following aspects. Firstly, the state owned commercial banks' system of the property right should be reformed and innovated. These banks should be gradually transformed into the emerging commercial banks. At the same time, the reform of state owned enterprise and the establishment of its modern system, so that its self-improvement ability can be enhanced. And the capital market should be developed to accelerate the capital flowing. Secondly, the reform and innovation of these banks' organizational structure and system should go a step further. Thirdly, these banks' personnel and distributive system should be developed. Fourthly, the innovation of these banks" risk management system should be innovated, including: the innovation of the system of assert and debt management, the innovation of the system of credit risk management, and the improvement of the system of inner examine and control.As for the external system environment, our fiscal and tax system environment should be improved. The state owned property should be used to solve the hiding fiscal debt to ease off the fiscal risk, and to resolve the problem of the fiscal risk being transferred to the state owned banking. And, the tax policy for the financial institution and change the method of calculating tax to lighten the state owned banks' burden.The innovation of this paper is as the following two aspects: firstly, the author make use of the achievement of Institutional Economics to provide an new angle of theoretical view and basis for the promotion of the state-owned bank's competitive power and its further reform. Secondly, with the comparison of the state-owned bank and foreign bank, the author exposes that unsatisfactory system is the deep reason restricting the promotion of the former's competitive power from a practical angle, and offers the solution to innovat...