To Fulfill Its Wto Commitments And Chinese Non-bank Financial Sector Development Trends

As part of the financial industry, the non-bank financial sector is a branch of financial system composed of financial institutions with no credit creation function such as securities, insurance and trust and investment companies. With only a short history of 20-odd years, non-bank financial sector has outreached state-owned commercial banks in terms of asset growth speed, and become a driving force for financial market development in China, and is also one of the marked achievements of China's financial reform. As financial service trade gradually opens to the outside world after China's WTO entry, it is a general trend that foreign-funded financial institutions will enter China's financial market, thus bringing opportunities and challenges to 'the non-bank financial sector. This article provides an overall discussion on the development trend of non-bank financial sector in China in the context of an open Chinese financial market as a fulfillment of our WTO commitments, with a hope to contributing to the reform of financial regime in China and to the adoption of strategies for an open financial industry.This article is composed of six chapters. Chapter 1 is an introduction, in which the author defines the meaning of "non-bank financial sector" and then introduces major issues to be discussed in this article. Chapter 2 covers the classification and characteristics of non-bank financial sector in developed countries, with country-based comparisons for the UK, the USA, South Korea and Japan. Chapter 3 illuminates several major problems arising from the current development through an analysis of its current condition. Chapter 4 mainly covers WTO rules and China's specific commitments on the opening of its non-bank financial sector. Chapter 5, the key part of this article, discusses the development trends of China's non-bank financial sector and puts forward practicable suggestions and strategies to address the afore-mentioned problems in the non-bank financial sector and the commitments to be fulfilled. Chapter 6 is a conclusion and points out issues for further study.The article provides a systemic investigation into the classification and characteristics of non-bank financial sector in developed countries, and suggests that, in the context of fulfilling WTO commitments, the non-bank financial sector in China should conform to the trend of world economic integration and financial liberalization, and spare no effort in improving its competitive power by learning from lessons of the same sector in developed countries and taking advantage of deepening reform in financial industry. To be specific, it would be an inevitable trend to enhance modern enterprise system reformation, to accelerate the march to capital market and to broaden collaboration with banking industry. It would be a practicable practice for non-bank financial sector in China under the current "divided operation" to conduct collaboration with the banking industry through the form of financial holding companies, so as to meet challenges from full-functional foreign-funded institutions. This will help improve the overall competitive power of our financial industry as a whole and will lay a solid foundation for the ultimate realization of universal banking in the financial industry in China.