Ownership Structure Of Chinese State-owned Banks

In line with the commitment upon China's access to the WTO, the protection period for financial industry is about to end. Commercial banks would face the fierce competition that they have never had before and quicken their reform process. The most noticeable events are the shareholding reform and the IPO of state-owned banks. For making the banks commercial, banks experienced several complex issues: whether the shareholding reform successes, which type of foreign strategic investors should introduced into, where and how to launch IPO, etc. But whether the reform benefits the banks'performance, financial stability, or even the social stability, then several parties'interests should be considered. For the biggest achievements, the best path of reform must be selected. At present, banks face the ownership structure issue after the shareholding reform. The ownership structure and the corporate performance are highly correlated each other. Taking CCB for example, after its shareholding reform and IPO at Hong Kong, did the reform success? Is the ownership structure the most efficient? This dissertation will analyze the reform of Chinese state-owned banks mainly from the ownership aspect. After explaining the relationship among ownership structure, corporate governance and corporate performance, this dissertation introduced the types and features of ownership structure of modern commercial banks in developed countries. Then, the privatization of state-owned banks, especially in transition economies is analyzed. In the end, this dissertation analyzes the development and reform of Chinese state-owned banks and points out several issues that still exist after the IPO,which include the major holder's responsibilities and rights, the influence on the boards, managers and incentive mechanisms that results from majority shareholding. Then the suggestions for ownership structure optimization of Chinese state-owned banks, which include reducing the government ownership, applying ESOP and golden share mechanism, cultivating domestic institutional investors, are given in the context of local economic and financial environments.