China's State-owned Commercial Banks' Bad Assets Cause Analysis And Countermeasures

Since the entry of WTO of our country, the banking industry, while confronting immense development opportunities, has to accept grim challenge which mainly reveals in two sides. One is that the major financial risk in our country comes from bank system while bank system risk chiefly shows quantities of non-performance assets which it owns. This situation not only affects self-development of our state-owned banks, what's worse, severely hinders social economic progress. The other one is that our state-owned banks have to exert themselves to handle their non-performance assets so as to compete against foreign banks since the entry of WTO and accelerate its development.First of all, the article makes clear the definition of non-performance assets and its characteristics, and further points out the status of non-performance assets of our state-owned commercial banks. And through analysis of internal and external causes of non-performance assets and on the basis of experience and lessons from Japan and South Korea in dealing with non-performance assets, some counter-measures are put forward to solve the problem in our country. Thus a method of transferring debts to shares in dealing with non-performance assets is emphatically analyzed.After discussing and studying the problem above, in accordance with practical experience of the writer undersigned who is engaged in bank non-performance assets management job, this article also point out some existed obstacles and difficulties in the operation of handling and clearing up non-performance assets, further makes some suggestions on non-performance assets policy-making in the hope of lending a hand in the efficient operation and solution of such problem.