Competition Tactics Of State-owned Commercial Banks Against Foreign Banks After China's Entry Into WTO

With China officially becoming a member of the World Trade Organization ( here-after abbreviated as WTO ), the Chinese banking industry, depending on its absolute market share and relatively mature market operation in Chinese financial system, has been changing greatly under the conditions of China's increasingly opening up to the outside world. The Chinese banks and foreign-funded banks have entered into a tit-for-tat rivalry in Chinese banking market as soon as China accessed into WTO. It makes the Chinese banking industry, which is the main lifeline to regulate macro-economy, step into an overall competitive times. Particularly, it imposes crucial and deep influences on the wholly state-owned commercial banks, which dominates in Chinese banking system.The writer tries to start from briefly describing the timetable for opening up to the foreign-funded banks after China's entry into WTO and comparing the foreign-funded banks with Chinese banks; and then analyze the current operating status of the foreign-funded banks and the operating strategies carried out by them in China; and at last, preliminarily bring forward the competitive strategies that the wholly state-owned commercial banks should adopt against the foreign-funded banks based on their present situations.Part One briefly describes the timetable for opening up to the foreign-funded banks after China's entry into WTO and compares the foreign-funded banks with Chinese banks.The foreign-funded banks have intrinsic advantages arise from their hundred years of development. Such as the possession of modern commercial banking system adaptable to the market economy; advanced banking management ideas and techniques; enormous overseas branches and correspondent banks network; powerful abilities to raise funds internationally; more efficient electronic banking system; high-quality credit assets; scientific market operating models and the inherent advantage of mixed-industry operations, etc. What's more, they also enjoy "super national treatment" to some degree in China. For all their advantages, however, the foreign banks' non-native characteristic can also lead to some problems. These problems may restrict their market share, during some time and to certain extent, in Chinese banking market.By contrast to the foreign-funded banks in China, the wholly state-owned commercial banks, being native banks, have some special advantages. For example, they dominant in Chinese banking market with their huge scale of operations; have more stable customers base for they are familiar with national policies, laws as well as cultures; possess bank network all over the country; enjoy the absolute advantage of engaging in Renminbi businesses during the transition period; and most important, they are characterized in China by the support of the state government creditworthiness. However, the wholly state-owned commercial banks still fall short against the foreign-funded banks in their operating and management system, financial services ideas and financial innovation awareness etc.Part Two analyze the current operating status of the foreign-funded banks and the operating strategies carried out by them in China.Depending on their unique advantages and enjoyment of "super national treatment" in transition period, the foreign-funded banks have grown up into an important element in Chinese banking system step by step from the perspective of the numbers of institutions, distributions of foreign country, geographical districts, bank strength, business characteristics and target markets. With the gradual improvement on their layout in Chinese banking market, the foreign-funded banks has determines their cooperative game strategy against Chinese banks on the part of high-quality customers, financial products, financial techniques and financial talents etc.In terms of high-quality customers strategy, the foreign-funded banks mainly focus on the medium and large sized foreign enterprises as well as Chinese enterprises or institutions involved in foreign businesses, both have large scale of bu...