Research On The Effect Of FSFDI On The Performance Of Chinese Banking

Economic globalization and financial globalization are developing in the worldwide,making the foreign capital have entered in many countries'economic systems,especially in banking systems called FSFDI and become a crucial role in their banking system.The entry of FSFDI into emerging markets will necessarily have significant effect on the economic function and financial system in host country,among which the most direct one is the impact on the performance of domestic banking. In China,the rate of the foreign capital entering the Chinese banking market is significantly speeded up.More and more foreign banks are diversified into China's banking system.With the reform of financial system,it became an important practical task to analyse the impact of entry of FSFDI on the performance of Chinese banking and put forward effective measures.First,this paper defines the conception of FSFDI, analyzes the styles and essences,summarizes the significant effects of FSFDI entry into host countries worldwide from theoretical and empirical perspectives.Then it introduces FSFDI's history and performance in China. In the context of this,it makes the research of the performance of FSFDI in China.Numerous research achievements show that if the foreign capital enter the markets,they will have a positive impact on the domestic banking through the effects of competition,technology spillover effect,the human capital effect and so on,promote the domestic banking markets to improve its performance.Then this paper emphasizes to make quantitative research on the impact of FSFDI entry on the performance of Chinese domestic banking.Based on the former study,it makes improvement on the model to make empirical analysis according to Chinese banking's condition.With Panel data of leading banks in China and Eviews5.0,it carries out an empirical analysis on the effects.The estimation suggests that the net interest profit, non-interest income, operating expenses,ROA,ROE increases with the entry of FSFDI.According to the conclusion,it tables a proposal which includes building the harmonious external environment of China banking market and enhancing the whole competitive ability.