The Study On The Influence Of Foreign Banks Entry On The Security Of China Banking Industry

Since the Export-Import Bank of Japan established the first foreign bank representative office in Beijing at December in 1979, the China banking industry has gradually quicken the pace of its opening up,and foreign banks'development in China has also gradually deepened. Foreign banks have gone through five stages of development: the initial stage in the 1980s, the expansion stage between 1992 and 1997, the adjustment stage between 1998 and 2001, the development stage between 2002 and 2006, when we join in the WTO, and the stage of the China banking industry's full opening in 2007. During this period, their developments have shown new features: changing their attentions from the pursuit of geographical expansion to profits, changing their strategy from competition to cooperation, and continuing to maintain advanced in technology and management, intensifying to register patents, and keeping its monopoly on technology and so on. The scope and power of foreign banks'impact is constantly deepening, and their advanced management experience, abilities on technology innovation and risk-control, has have a great impact on China banking industry.In this paper, in reference to the large number of literature, we analyze the security impact on China banking industry arised from the foreign banks entry. First of all, we conclude the domestic and foreign scholars'studies, and present our framework; then we further analysis the development of both foreign banks and China banking industry, and point out the problems of our banking industry in responding to the attacks from foreign banks. In the part of empirical analysis, we firstly use linear regression to analyze the foreign banks'impact on macro security, the power of control, of China banking industry. Then we use pool model to analyze the foreign banks'impact on micro security, the revenue structure and stability. At last we analyze the case of Shenzhen Development Bank, which further demonstrate the impact on micro security.The conclusions of this paper show that foreign banks entry has not threatened the macro-control of China banking industry, and its impact on the stability of the banking industry is also uncertain, but it further deteriorates the revenue structure of China banking industry. The demonstration effects, property effects and competitive effects of foreign bank entry are all embodied in our country. Finally, on the basis of the above conclusions, we propose our recommendations on improving the security of our banking industry. Such as, facing the cooperation with foreign banks, further optimizing the revenue structure, and improving the risk control capacity and reducing the costs.