On State-owned Commercial Banks To Respond To Competition From Foreign Banks Countermeasures

On December 11th, 2001, China joined the WTO. After that, our government canceled the limitation of foreign banks dealing foreign exchange business in China, and allowed the foreign financial institutions in Shanghai, Tianjin, Shenzhen, and Dalian to conduct RMB businesses. And this allowance set out the competition between China banks and foreign banks.Currently, not only in business scope, business types, but also in business volumes, the foreign banks in China have developed greatly. On the respect of management, dealing strategy and customer relationship, the foreign banks have formed their special modes. Foreign banks have become an important part of Chinese banking system. It brings not only competition pressure but also opportunities for our country to take part in the WTO.Compared with Chinese banks, the foreign banks are facing with some advantages and some disadvantages. Most of them have established a healthy dealing& managing system, a customer oriented service system. They can make a good use of their globally or international service system, and don't take on any policy business.But foreign banks have also some disadvantages. They have no adequate business network, have some difficulties in the cultural fields when connecting with Chinese customers. Their locally financing ability and the relationship with local Chinese government are both to be developed.Through the comparison with foreign banks, our state owned banks have the following three advantages. First, we have a developed service network throughout the country. The second is that we have a close relationship with the governmental department of all sorts of industries. And the last is that our employees have a deeper sense of being a family. But our disadvantages seem more serious, especially on the respect of marketing sense, dealing mind, management system, business flow and the comprehensive quality of our employees.Facing with the serious problems, we should take the following steps to develop our competition position.1. to set up a sense of profit first, customer most, dealing stably and healthy, winning by competition;2.to reorganize the business flow and set up a customer and market oriented business flow;3.to thoroughly adopt the customer representative system, making the products, price and service differently according to the different customer demands;4.to strengthen the risk management, set up a healthy internal conducting, supervising and limitation system;5.to set up a reasonable performances assessing system and a scientific stimulating & limitation system.