Property Rights System Reform - The Reform Of State-owned Commercial Banks, The Inevitable Choice

While receiving and propelling the economy of China to an unprecedented level , the 20-year of reform and open-door policy has alaoCreated a block of iceberg---the Chinese banking industry, which refuseto be melted by the heart of reform.By the end of 2002, of the many influential financial research bodies and credit rating agencies that delived a series of research reports on the Chinese banking system, Goldman Sachs poited out in its research report in Dec. 2002 that the bank insolvency such as the one experienced by the South East Asian countries during the financial crisis did not pose so big a threat to the Chinese banking system as the collapsing banking system of Janpan caused by the absence of the much needed total finacial reform. This lack of reform has seriously inhabited the recovery and the growth of the Japanese economy .As said in Moody report of Oct 2002, the Chinese banking industry, playing a critical role in the reform , ranks high on the priority list of government reform agenda. The uniquenese of the Chinese reform has decided the banking industry role:the high ration of bad loans and find a way to pay for the huge costs if it intends to re-establish a healthy banking syetem. Almost all international evaluation reports agree that the reforms of the Chinese banking industry have been minimal in recent years .The inefficiency and lack of competency of the state-owned commercial banks will put them to the grave tests of WTO .The 20 plus years of reform has seen the decreae of the state ownership in most industries. As the most inportant link of economical chain , the state-owned commercial banks represent the final hurdle to clear in the reform of the state-owned enterprises.The single ownership of the state-owned banks has become the biggest hindrance to the reformof the commercial banks .Transforming the state-owned cimmercial banks to the real contemporary commercial banks repuires the dismantling of the single ownership , putting in order of the ownership relationship , and the increased liquidity of the further reform . This paper intends to explore the issues in the following sequence:Chapter one reviews and briefs the basic theories of the modern banking . As a unique" capital structure,offer a unique commodity "of money , and greatly affect the state of economy. A series of finacial crises have exposed the inefficiency of the monitoring measures adopted by diffierent countries and need for tighter internal control .To establish and effectively restructure the Chinese banking system demands the clarification of ownership issue.Chapter two introduces the modern enterprise system aimed at clarifying the fact that mordern enterprise is characterized by its clear ownership, and that commercial banks, being part of the modern enterprise,must also satisfy this requirement, and analyses the effects of ownership on enterprises and commercial banks and the practices of ownership in the western banking industry to provide a reference to the commercial banks and the practices of ownership in the western banking banking industry to privide a reference to the commercial banking reform in China.Chapter three discusses the current state of the Chinese commercial banking ownership limits the sources of capital and leads to a high ratio of bad loans and low profitability.Chapter four explores the necessity and the emergency of the ownership reform of state-owned commercial banks, points out that the aim of ownership reform is to establish a modern banking system, and suggests that the reform of the state-owned banks start with the issues of shares.