Joint-stock Reform Of State-owned Commercial Banks In China

As the development of the reform and opening and the gradual opening of domestic financial market after China entered the World Trade Organization, commercial banking market become increasingly competitive. So the national commercial banks have to reform deeply, that is increasing the capital adequacy and gradually build up modern commercial banking system.This article introduces the theory of property rights and corporate governance of modern enterprise system as theoretic basis, explains the necessity and the significance of the state-owned commercial banks'shareholding reform and coming onto the market from the aspects of banks themselves and the whole national economy. As national financial market open gradually and foreign commercial banks surge in to financial field, competition calls for the state-owned commercial banks'shareholding reform and listed in the stock market stronger and stronger. At the same time, the experience of reform of foreign commercial banks, especially the importance of shareholding reform, are analyzed from several aspects, such as the structure of property rights, corporate governance, the capability of endurance of risk and corporate management. Then the revelation of the reform of foreign commercial banks to Chinese state-owned commercial banks is mentioned. In addition, the article introduces the process of the reform of ChineseState-owned commercial banks, ranging from 2003 to 2006, taking example of the Construction Bank of China and Bank of China, both of whom applying to similar strategy, which contain the steps of financial rearrangement, introduction of foreign investors and improvement of corporate governance, shareholding reform and IPO as well as more deeply improvement of corporate governance and settlement of modern commercial bank governance system. Moreover, the paper focus on the drawbacks and problems which might appear in and after process of the shareholding reform of Chinese state-owned commercial banks: 1, the problem of non-perform assets and improvement of low ratio of assets; 2, Chinese state-owned commercial banks would confront with more risks after the shareholding reform, especially the IPO, for instance, the risk of market, the risk of financial derivatives, the risk of credit and so on. 3, the structure of corporate governance is still need to be done some reform to get better. 4, what can be attended from the foreign institutional investors is limited and less than the expected; at the same time, the system of the revelation of information is still on a long run. Then this paper gives several available strategies and policy, separately for the state and government and the Chinese state-owned commercial banks themselves.