The Effect Of The Entrance Of The Foreign Capital Banks And The China's Countermeasures

As China become a member of WTO, according to GATS and new FSAregulation, the finance market will completely open, which means to open thebank industry, allow foreign banks set up their branches, and offer the sametreatment to foreign banks, etc. WTO not only bring our banks impact and thepressure of competition, but also bring us the chance of accelerating growing upand join the international competition. In this article, I thoroughly consider theadvantage and disadvantage by importing transnational banks to local economyand the development of local finance industry, and propose some suggestion topolicy decision with reason, which will be helpful to the study of our countryfinancial reformation and deepening.The first chapter reviews the history and status in quo in China. Thoughtransnational banks had a history as long as a hundred years (1845-1955) inChina, transnational banks were excluded from the foundation of new China tothe year 1978. With the reformation and open-door policy carrying in toexecution, the finance industry opening restarted. On Dec. 11, 2001, Chinabecame a member of WTO officially, which open a brand new page to Chinafinancial industry.The second chapter recollects the long and exhausted process and theactuality of the banks in China. It took 15 years for China to be a member ofWTO. On Nov. 15th,1999, China and USA reach their final agreement on Chinajoining WTO, which greatly accelerate the process of China becoming amember of WTO. Our country officially became a member of WTO on Dec. 11,2001 as the 143rd member. As our country being a member of WTO, weclearly understand the actuality of the local bank industry. Only by averagecapital, number of staff, etc, domestic banks do not have the capability to goabroad and enter the international competition. What s more, there are alsomany problems inside themselves. Therefore, finance reformation is neededand must be deepened.The third chapter analyses the effect of foreign capital bank in detail inmacroscopic. Competition in financial market is benefit in some degree, whichwill break the monopolization, increase the efficiency of financial agency. Wecan regard foreign banks as pure competitor in international market. Allowingthe foreign capital banks join freely will be more effective than inlandcompetitor. Therefore, to import foreign capital banks is important for buildingup free competition financial market. What is more, our country s economy ison the stage of taking off, importing foreign capital properly to supply theshortage of domestic saving is an important means. Meanwhile, foreign capitalbanks effect greatly in attracting foreign capital. What s more, foreign capitalbanks play an important role in promotion human resource exploration for thehost country.The forth chapter of the article analysis the influence of foreign capitalbanks in microscope. In modern finance industry, network most import for anyfinancial agency and its technology. To invest network is not a matter ofdecision but a matter of survive. Foreign capital banks coming into Chinamarket will accelerate the innovation of domestic banks. To run in the hostcountry, transnational banks, on one hand may reorganize the framework of itsown deal to the change of the external circumstance; on the other hand they willreact on the development and innovation of the banks of the host country.Transnational banks need more effective and more perfect management. Inother words, the effective management of transnational banks promotes thebanks of the host country, and the transfer within the system and innovationsystem, which were mentioned above, are the two main aspects.In chapter five, I will discuss the influence of the entrance of foreigncapital banks and the impact on Chinese banks under the open-door policy inthree aspects, and discuss the future of Chinese bank industry. I choose theperiod is between allowing foreign capital banks engaging host currency loan,as in WTO regulation, two or three year after China joins WTO, to a middleinterval, about five years. I have received some conclusion by analysis thestatus of foreign capital banks and the domestic banks and together the status oftransnational banks in other countries. Foreign capital banks have their own...