An Analysis Of The Effect Of Foreign Banks Entering Our National Banking Market

China has joined the WTO for more than three years, along with the gradual opening of our national financial market; foreign banks business is developing swiftly in China. On the one hand the net institutions increase continuously, on the other hand the result of foreign banks participating local banks yield striking. In short, the development of foreign banks is in a good state. The strong and big shock waves haven't appeared which people predicted before the entrance of foreign banks. Foreign banks have become an important force of the Chinese banking. Local commercial banks, including the state-owned commercial banks, reform and develop quickly in different way. The local banks and the foreign banks draw a new painting together to get both-wined cooperation in the Chinese financial market. After 2006, our national financial market will open completely, and the reformations of the local banks have already entered the key stage. Recently, the China Banking Regulatory Commission(CBRC)revised the 《detailed regulation of foreign financial institution management 》, lowering the quantity of the capital which foreign banks used in business and running, simplifying the file of running capital, reducing the administrative levels of examine and approve ,adopting the system of examination and approval and the system of record on the scope and assortment of foreign banks'business, most of them the adopts the system of record, providing foreign banks developing juncture to opening business in Chinese. Obviously, the policy has create more convenient terms for development of foreign banks in Chinese, meaning that the development of foreign banks in our national will lift completely soon. Peoples pay close attention to both superiorities of local banks and the foreign banks and on the financial market develop one after another. This text summary and describe the present situation of foreign banks'development since three years before when China entered WTO,as the foreign banks entered our national financial market, use rationing and qualitative analysis, make a evaluation about the conduction mechanism in market and influence caused by the foreign banks. In the last three years nearly, whether the economic increased in high speed, partly extremist or the macro adjusts and control, the foreign banks in China keeps steady development with good quantity of property mostly, realized the speed unifying with the quantity, and acted a positive function to promote the Chinese financial reform and development. Along with the complete open on the financial market and the speeding development of foreign banks'business in China, we can conclude: In the aspects of banking efficiency, the enter of foreign banks enabled increases the level of local commercial banks management gradually, the scale efficiency got a larger increases, the whole efficiency of commercial banks had a big increase, especially the whole efficiency of the shareholding commercial banks increased more quickly. Announcing that the central government and the governor of the banking in order to strengthening the banks ability of competition and resist the risk, adopt measures which have got positive result, including simplifying organization and surplus person, lowing bad assets, increasing the adequate rate of capital etc. The efficiency of the state-owned commercial banks has raised, but compared with shareholding commercial banks, still have very big disparity. After foreign banks entering our national market, by means of enlarging the scale of the savings, lowering the rate of loan, enhance the economic effect of competition, investing Chinese commercial banks. Pushing improvement effect by participating Chinese commercial banks, foreign banks lead more extensive mechanism of market and price into in the banking market. Promote the whole efficiency of the Chinese banking in the end. The result of analysis evidenced on the Southeast Asia expresses, the banking opens in higher degree, the higher quantity and the smaller frail quality which banks will have. But the similar result can not get in theories deducing. The competition pressure and liberalization trend of the trade of service bring by foreign banks, the difficulty in stabilizing financial economic is the main risk source of unsteady. Foreign banks vary aspects of earnings, loan and supervision to make function to bank system. With the case of stability of bank system, and what kinds of fluctuate will appear being decided by the influence factors from different and the result of cooperated game. Parts of effects caused by foreign banks transmit to our national banking in the financial market. The development of our national financial market is not perfect yet. The market system is not strengthen, then cause conduction mechanism can't be smooth, it can't maximize the function recommend foreign banks, and also disadvantage the authorities to practice the charge and guide to the foreign banks effectively in the market. The restrain term of our national financial market is the price mechanism, competition mechanism and circulates mechanism. In order to make the market mechanism perfect, should push forward the progress of market interest rate, perfect withdraws mechanism of financing institution in market, to realize the excellence in and inferior out, increase total efficiency in financial system. At the same time it should enhance the market administer and supervise still to take effective charge and guide to foreign banks.