Research In The Issue Of The Cooperating-Competition Of Chinese Banks Against Foreign Banks

11^th,Nov.2001,China had been admitted to be a member of WTO, and had promised complete opening the banks'market by 11th,Nov,2006,so foreign investing banks could deal in RMB transaction without the limitation of district and customer. Chinese Banks would compete against Foreign Banks on the same one platform under same environment and conditions. There will not be absolute equity in the short initial period. Facing the strong power and sophisticated global marketing experience of Foreign Banks, Chinese Banks can not obtain absolute advantages. Although both Chinese and Foreign Banks compete under the same conditions, yet they are not on the same level. At the same time, Chinese Banks especially the nation-owned banks will be inevitably assisted by the government. Beside this, Chinese Banks have operated in Chinese market for many years, their operating net and opinion has been accepted by Chinese people. They are the most reliable banks in the view of Chinese people. Obviously, on this aspect, Chinese and Foreign Banks are also not on the same scratch line. Advantages and disadvantages of both sides are distinct. How should both Chinese and Foreign Banks arrange their relationship and the Chinese Banks locate their position in this contest are the problems should be settled immediately.Regarding the problem of the relationship between Chinese and Foreign Banks, there are two viewpoints. One said the entry of Foreign Banks is that the attacking army has reached the city gates. Facing the great enemy, Chinese Banks should make full preparation and manage to guard their market. The other said that once the opening up of banking can not be held up, the cooperation between Chinese and Foreign Banks is inevitable. Chinese Banks should cooperate with the Foreign Banks as soon as possible, so that they all can rearrange the banking market in China and get more profits. This can advance the power of Chinese Banks and Chinese Banks can obtain more share of Chinese market during a shorter period. One viewpoint claims'war', the other one claims'peace'. Whichever view, the essence is that they all manage to let Chinese Banks advance their contesting power and maintain profit facing the challenge of Foreign Banks. But both of them considered too unilateral about the relationship between Chinese and Foreign Banks. They did not analyze the trend of development of Foreign Banks which is the special style of foreign company, so that they can not advisably decide to choose cooperation or contest on the relationship between Chinese and Foreign Banks. Under present conditions, Chinese Banks should choose cooperation priority to competition and adopt cooperating- competition method to deal with the relationship between Foreign Banks. Chinese Banks should maintain competing concept to prevent from becoming the tool of Foreign Banks to invade Chinese Banking market. We should analyze the tendency and developing steps of Foreign Banks from their essence under present national and international environment, so that we can correctly seize the character of the seedtime of Foreign Banks. In order to upgrade their competing power by material tactics Chinese Banks should choose neither entire cooperation nor entire competition, but choose cooperating–competition measure for measure. So that they can obtain absolute advantages to scrabble for more market share and customers in later period and at last walk up to global financial market.This paper is separated into five parts. The first part illustrates the background and meaning of the issue, and brings forward the problem of the relationship between Chinese and Foreign banks. Beside this there are the aim and method of research and the invention of the paper. In the second part, I find out main basic theory supporting the Cooperating-Competition. The third part includes the situation of competition and the development of Chinese and Foreign banks. Then the paper analyzes the separate advantages of them. Apart from these, the paper also details the condition around both parts and their strategy arrangement. The fourth part puts forward the specific tactics in prophase of Cooperating-Competition of Chinese banks in the terms of the relationship between Chinese and Foreign banks. Among the abundant tactics there are introducing foreign banks to be one of the shareholders of Chinese banks, the cooperation in all range of the operations of both sides, and so on. Then the paper demonstrates the effect of the tactics. The fifth part details the potential risks of Chinese banks in the course of the Cooperating-Competition. Then the paper advances the conception and suggestion of deal with these risks. In the end, the paper reaches the conclusion that the Cooperating-Competition between Chinese and Foreign banks is the most advisable and reasonable choice.