System Innovation To Meet The Only Way To The Wto Challenges China's Banking Sector

With the persistent attempt of the government, the time for China to enter WTO is now counting down. In order to face the challenge after catering WTO, all industries in China are busy making preparations in advance. As the main force of financial service, banking industry, however, has been one of the weak points, and would be greatly affected. The commercial banks would have to seize the historic opportunity as well as to face the challenge to increase competition power by accelerating the system innovation for the purpose of ensuring further development. This essay will analyze the issue from four main aspects and therefore draw a conclusion on the strategic alternatives for Chinese banking industry after entering WTO.I. A brief introduction to WTO and China'szigzagging way to itIn this section, the author gives a brief introduction to World Trade Organization (WTO), which inherited the original General Agreement on Tariffs and Trade (GATT). At the same time, we could also have some idea on China's zigzagging way to it.II. An analyze on the present situation of ChineseBanking IndustryState-owned commercial banks in China are derived from four specialized national banks - the Industrial and Commercial Bank of China, the Agricultural Bank of China, the Bank of China, and the Construction Bank of China. But in a long time, there exist a series of problems such as the singleness of business structure; non-performance assets; framework efficiency; the interference from government administration; less room forrestructuring the assets diversely; and lack of competition experience in world market.III. An analysis on cost and profit of the bankingindustry after China enters WTOIn this section, the author analyzes the profit and the negative impact that WTO brings to Chinese banking industry. And draws the conclusion that in the long run, it would be retained profits for banking.IV. system innovation is the inevitable alternative forChinese banking industryEntering WTO is a symbol of China's promoting reform and open-door policy. The commercial banks would have to seize the historic opportunity to make full use of the flowing in foreign capitals and accelerate the system innovation internally and externally. On the other hand, we must perfect the related laws and policies to better supervise and control the practice of the foreign-funded banks. This should be an inevitable alternative for Chinese banking industry.Thanks for all the help ever had, especially the valuable instructions from Professor Chen Yawen.