A Study On The Commercial Banks' International Competitiveness In China

In December 2006, the transition period which China commit to the World Trade Organization——opening up the domestic banking market in 5 years had ended. Foreign banks which enjoy full national treatment push into the Chinese banking market. More fierce competition will take place in between Domestic Commercial Bank and Foreign Commercial banks in client, geographical and other aspects. In August 2007, Subprime crisis which originated in the U. S. began sweeping the world's major financial markets like U.S., EU and Japan. And then the international financial crisis triggered by the Subprime crisis sweeps the world. It has influences on various countries'banking sectors in various degrees, inevitably affects the international competitiveness of national commercial banks.With the international competitiveness theories and commercial bank management theories as basis, drawing lessons from domestic and foreign literatures and data about the enterprises', especially the commercial banks'competitiveness, this paper gives a definition of commercial banks'competitiveness as Commercial Banks'Competitiveness refers to commercial banks integrate all sorts of resources including the macro-environment adequately and reasonably, guided by the principles of profitability, liquidity and security under the market mechanism, so as to exert longer and developmental comprehensive capacity in comparison with competitors in the market competition. Further more, based on the generalization of five evaluation criterions for commercial banks' international competitiveness, this paper structures its own evaluation criterion:selecting core capital adequacy ratio and capital adequacy as measurement index of development ability; selecting loan loss reserve ratio, impaired loan ratio and net bad-debt ratio as measurement index of asset quality; selecting interbank ratio and the proportion of net loans to total assets as measurement index of liquidity; selecting return on assets, return on average assets and net interest margin as measurement index of profitability. Following by the analysis of domestic, American, European Union and Japanese large commercial banks'international competitiveness, this paper compares them and find that:first, state-owned commercial banks'international competitiveness is stronger than joint-stock commercial banks'; secondly, American commercial banks'international competitiveness is weaker than state-owned commercial banks', but stronger than joint-stock commercial banks'; thirdly, European Union's large commercial banks'asset quality and liquidity are stronger than domestic banks, development ability is a little bit weaker than state-owned commercial banks', but equal to joint-stock commercial banks', and its profitability is much weaker than state-owned and joint-stock commercial banks'; fourthly, Japanese commercial banks'liquidity is stronger than state-owned and joint-stock commercial banks', and its development ability and asset quality is between state-owned and joint-stock commercial banks', but its profitability is much weaker than state-owned and joint-stock commercial banks'.Finally, based on the conclusions above, this paper proposes several policy recommendations from prefect company governance, widen business scope and strengthen banking supervision aspects to enhance domestic commercial banks'international competitiveness, hoping to provide some references to commercial banks and supervision department.