Foreign Banks Into China's Impact Analysis And The Development Of China's Banking Sector

The issuance of Regulations of the People's Republic of China for the Administration of Foreign Banks means China banking industry comprehensively opens Renminbi service to foreign capital bank since December 11th, 2006.Therefore; Chinese Commercial Banks would compete with the foreign capital banks more fiercely. The foreign capital enters our market to large-scale, which will have significant influence on our banking industry, such as competition pattern and the market order, even finance safety. So, Studying some suggestions has important practical significance to guarantee finance stability.The introduction of foreign capital banks of developing countries benefits for the perfection of host countries financial market, promotes the international process of host countries' financing, promotes the formation of the competition mechanism between host countries' banks, raises the ability of competition and management of host countries' banks, attracts foreign capital in international financial market,. The positive functions were obvious, but the introduction of foreign capital banks also has negative functions.Foreign banks flowed in and have increased the instability of bank system. First, the competition maybe results in Chinese Commercial Banks losing a lot of clients. Second, Chinese Commercial Banks will lose intermediary business in certain aspect. Third, a lot of clerks choose to leave Chinese Commercial Banks. Fourth, the introduction of foreign capital banks makes it difficult to control macroscopic economy situations. Fifth, it is difficult to supervise the foreign banks prudently and effectively.The article draws the conclusion that the introduction of the foreign capital banks will be helpful to improve the national financial conditions in short period. But in long period, it makes people confused. From the worry caused by foreign capital banks in their business, considering the probable influence on our country's banking by foreign capital banks, the article intends to find ways to strengthen the competency of our commercial banks in order to set up a new Chinese banking system.The article altogether is divided into four parts. First of all, it reviews the general theories of the probable influence to host countries' banks by foreign capital banks, and specifies the patterns in which the foreign capital banks enter our market to large-scale; introduces the comparisons of state-owned commercial banks and foreign capital banks; on the basis of the patterns and comparisons, it points out that the probable influence to Chinese banks by foreign capital banks. This article also analyzes the beneficial impacts and the challenges from Foreign Capital Banks, Furthermore, it also proposes some suggestions for commercial banks facing challenges from foreign capital banks as follows: the cooperation and the competition between state-owned commercial banks and foreign capital banks; building up the modern economy and management system according to the international rules; attaching importance to the customers relationship management; consummating foreign capital bank supervision and regulation suggestions.