Analysis Of The Impact On Chinese Banking Efficiency In The Deregulation Of The Entry Of Foreign Banks

Since the1960s, along with the globalization of international trade and investment,the internationalization of finance is also developing at an alarming rate, and thenumber of agencies of foreign banks in many countries is increasing and becomingmore and more important. The first foreign banks to enter in China is Japan’sExport-Import Bank, a representative office in Beijing in1979. In recent years, theopenness of China’s financial sector has been growing,more and more foreign banksin China is to set up a representative office or branch. After accession to the WTO in2001, the door to China’s banking industry is gradually opening up to foreigninstitutions, and China also fulfill the commitments made in accordance with theaccession to the WTO, the liberalization of the banking sector has been open toforeign banks in2006.What is more, china also has cancelled in all aspects ofcustomers and geographical restrictions on foreign banks.The way to enter china for foreign banks is divided into three, shares orholding-funded financial institutions,to establish a representative office or theestablishment of subsidiary. In china, most of the foreign banks enter the country inthe form of commercial banks shares. The foreign banks are commercial banks withforeign ownership.In this article, foreign banks are commercial banks with foreignownership.The thesis discuss the efficiency of twenty-four commercial banks from2004to2009,using Non-parametric methods, including DEA and Malmquist Index. Thetwenty-four banks are divided into three categories, the four major state commercialbanks, Joint-stock banks, foreign commercial banks. This article is divided into fourmodels, Model1is the basic model, Model1a is created on the base of Model1. Theoutput of the loans is subdivided into two categories, Corporate and commercial loansand Net of loan companies and commercial loans. The purpose is to measure the commercial bank efficiency of retail-focused. The model1b adds the increaseinvestment as an output variable to measure the efficiency of commercial banks ofwholesale. Model two discuss the banks’ efficiency from the point of revenue.This article analyzes the change in the efficiency of these three banks between2004and2009. The results show that the entry of foreign banks has promoted theoverall efficiency of our bank, especially after2006. In addition to the subject of theglobal financial crisis in2008, the remaining years of banking efficiency have beenenhanced. Changes in the efficiency of the four major state commercial banksfluctuated. The entry of foreign banks also did not produce significant efficiency onthe efficiency promoting of four major state commercial banks.