Reform Of Chinese State-owned Commercial Banks

Under the wave of world economic integration and financial deregulation, China's banking sectors quickens its step opening to the outside world and faces keen international competition, especially after China' s successful entry into WTO. Being the main part of China's finance, state-owned commercial banks' assets occupies more than 70 percents of the general, which competition ability determines the whole directly. As to the present situation, there are still much more difference in corporate governance, operational institution, capital adequacy and assets quality comparing state-owned commercial banks with major international banks. So we should quicken the step of the institutional reform of the state-owned commercial banks and set up modern-commercial banks' system that satisfies the demands for the development of market economy, reform and opening. Improving competition ability, averting and controlling the financial risks effectively have practical and profound significance.The institutional reform of state-owned commercial banks should start from transparent financial structure of property rights, promote stock-system reform of state-owned commercial banks and finally become to be share-holding commercial banks which is in the charge of the state and has various property body. As well as we should promote the state-owned commercial banks satisfying the essential requirements to go public. According to the current basic principles, state-owned commercial banks should establish modern-commercial banks' corporate governance combining with our specific national conditions. It can reduce the possibility of principal-agent problem caused by the separation of proprietary rights and administrative power. Furthermore state-owned commercial banks should research the work of multi-operation business, try to open up new business, promote the innovation in financial products, make further improvement on the establishment of internal control system and strengthen the ability to avert risks. Finally it becomes to be the real modern commercial banks.