On Accession To The Wto And China's Opening Up Of The Banking Sector,

As a membership state of WTO, China will assume corresponding obligations while enjoying its own rights. It must open its service industry in accordance with the GATS. Banking, an important component of this industry, will doubtlessly embrace the unprecedented competition.Opening and competition, in a long run, are contributive to the stable development of banking, but in the meantime inevitably strike the industry. Foreign banks have a history of for over 20 years in China and will acquire equal position with the Chinese banks in the next 5 years. For the moment, foreign banks take some advantages over the Chinese banks in terms of profitability and innovation. However, the latter get the run upon their foreign counterparts in areas such as network and local currency businesses. They, in the course of competition, can absorb advanced managerial skills and, in cooperation with the foreign competitors, make the market bigger.China's entry of WTO forces it to make some adjustments to the monetary policy and to speed up the mix-up operations of the banking industry.At the initial stage of opening policy, "increasing participation" and "progressive liberalization" by GATS could be applied to undermine the adverse impacts of foreign banks. Going abroad is also essential. Yet the key point lies in radical reform in the banking sector to actually upgrade their competitiveness.