Efficiency Analysis On China Commercial Banks Based On DEA

Since China joined the WTO, the Government has done a lot to promote financial liberalization and internationalization, eliminated a number of financial regulations, and adopted a series of financial reforms. At the same time China has been gradually opening up a variety of financial services, and admitted the operations of foreign banks, During this time, the types of banking business was not increasing, So it caused the competition in the market more and more intense.In response to increasingly fierce market competition, China banking has conducted a series of sweeping reforms. On the regulation, we have developed more systematic and scientific regulatory framework based on Basel II combined with the actual situation of China's financial situation. Meanwhile, in order to improve the banking competitiveness, the corporate structure were also reformed, the foreign strategic investors were introduced, bad assets were disposed, and the state-owned banks'joint-stock reform was actively promoted, making it be responsible for its own profits and losses. In 2003, the Central Huijin injected 45 billion U.S. dollars to promote the Bank of China and China Construction Bank's joint-stock reform, as a sign that China started a large-scale joint-stock reform of commercial banks, and the main purpose of the reform is to improve banking operating efficiency.In China, the current financing structure is still based on the banking system mainly as an intermediary in the indirect financing; commercial banks'operating efficiency has a direct impact on the level of capital allocation efficiency. And it also affects the production of enterprise and the life of the residents. So, although the banking system is not directly engaged in the material production, its efficiency has affected the entire national economy. The U.S. subprime mortgage crisis occurred in July 2008, it resulting large-scale financial crisis on the world economy. Although during this crisis, China did not appear the phenomenon of large areas of bankruptcy for the good economic fundamental. But the fact that the crisis originated in the financial sector has make people pay more attention to the healthy development of the bank. Therefore, the situation of efficiency of China's banking industry after the joint-stock reform has been widespread concerned by the community.Based on the data envelopment analysis (DEA) method, this paper analysis the performance of China's commercial Banks. Using the 1999-2008 data, I calculate the technical efficiency and productivity index, make the decomposing of the index at the same time, I want to find the reason of the change. And through the comprehensive analysis, I put each bank in a coordinate. We also study the effect on banking of the reforming of state-owned and the influence of the international financial crisis which is started at 2008 on China banking efficiency.