National Regional State-owned Commercial Banks How To Deal With The Challenge Of Foreign Banks

This thesis is composed of four parts : in the first chapter, it analises the changes of market environment of minority regions after the entry of WTO and the basic strategy of competition in banking industry. First, the regional market changes are illustrated in terms of micro, macro as well as financial aspects, then the market format of regional banking is discussal. In chapter Two , the basic characteristis, difficulties and problems faced in the reform and development, and comparative competition advantages of regional state-run commercial banks are studied . The difficulties and problems come from property subject, organization establishment , capital compensation capability , intenal control , credit management, non-interest-earning asset, new products'innovation, etc. The advantages are from local and foreign currency interaction , market share and growth potentials. In Chapter Three, the characteristics and comparative competition advantage of foreign banks are discussed . Their characteristics are as followed : 1.market-oriented management ; 2.mechanism flexibility ; 3. fewer affiliates , smaller market share and low public identification. The advantage lies in high asset profitability , high loans growth ability superb management, fast innovation, good income structure , reasonable allocation , developed international accounting network , sufficient capital , strong technoledge back-up , highlighted clients assessment , mature inner control of credit and loans , stable credit risks insurance, strong service and organization capability .Meanwhile , the strategies for competition of the foreign banks include: 1. As far as the customers are concerned, the foreign banks put their emphasis on the twenty percent of the total customers. These customers can bring eighty percent of the profit and market share to the foreign banks in spite of their limited number. 2. As for the regions, the foreign banks prefer to the cities along the coastline and those central metropolises. 3. In their operation, they will undertake the business, such as the separate operation with high ratio between input and output as well as the high knowledge value, the intermediate business and the individual consumer credit. 4. Thebanks will pay attention to the cooperation among different banks, develop the network banks and attract and train more and more talents who are expert in the operation of RMB. Chapter Four , discuss the system reform, business development and innovation , organization insurance strategies of regional state-run commercial banks: 1. Exploration of the reform and innovation direction , keeping the track of international practice , such as share-holding reform, truly enterprise management , business multiple dimentions management , standardized management , establishment of scientific mechanism , contractation and capitalization of allocation means , etc . 2.In market orientation , more efforts are to be made to promote market innovation while occupying and stabilizing former market under new environment are fully studied so that the innovation cored business management mechanism is established . Market sales strategy in the long term in order to develop new clients and business and form market strength and good service image . 3. In the field of basic business , according to the concept of modern state-run commercial banks , private business, enterprise business, counterpart business , middle business , credit and loan business , international business are developed while exploring a new business management way . in accordance with China's reality . The goal of this thesis is to discuss that regional state-run commercial banks are to take actions and make well preparation in order to face the challenges of foreign banks .