The Influence Of Foreign Banks 'Entry Into China' S Credit

Along with China’s reform and opening up and joining the WTO, China’s banking industry is also constantly opening up to the outside. Along with the canceling of the restrictions to the geography and customer for the foreign exchange business in2001and then the canceling with this two respects to the RMB business in2006for foreign banks, the scale of foreign banks in China keeps expanding. This article intends to discuss the influences of foreign Banks entry on the China’s credit.Based on summarizing the predecessors’references, together with the history and current situation of foreign banks’development in China, I put forward my own analysis point of view which is to analyze the effect of the foreign banks entry to China’s credit from the national level, bank level and regional level separately and empirically.This article first using the quarterly statistics from1995to2010to analyze the effect of foreign banks entry to the total amount of credit and to the private credit. Then using the data of selected13listed banks in China from1996to2010to analyze the effect to the bank credit. Finally, it used the data for the31provinces and municipalities in China from1995to2008to analyze the effect to the regional credit. Furthermore, the paper divided the regions into two categories, developed regions and less developed regions. Then analyzed the effect of the foreign banks entry on the regional credit separately.The regression results showed that foreign banks entry degree are significantly negative with the credit level in all three levels. The China’s credit is shrinking with the increasing of the foreign banks’total assets.Based on the effects brought by the foreign bank entry, this article offered some corresponding proposals from aspects including the choice of foreign banks, response of domestic banks and enterprises, the development of the financial institutions and financial infrastructures in our country.