Analysis Of The Operating Efficiency Of Foreign Banks That Operated In China Based On DEA Method

After China officially joined the World Trade Organization On December11,2001,the speed of foreign banks entering into Chinese financial market accelerated, the competition and cooperation with Chinese local Banks was to expand.According to the information provided by the China Banking Association, at the end of December2012, there are foreign banks from49countries and regions set up42legal person,95branches and197representative offices in China. The number of foreign banks’ sales network including branches have reached900. Positive progress had made in foreign Banks operating in China, the scale of operation, the number of customer and the service ability is going better. Foreign Banks main business areas in China’s except the traditional credit business, also involved small and medium-sized enterprise financing, commodity trade, asset management, custody and settlement services, etc. Some foreign banks have been approved to carry out the debit card business. Next step, the foreign banks should expand the credit card business. Part of the foreign capital legal person banks have asked for a-share listing and issuing subordinated debt, in order to seek the long-term development of China. All of these show that many foreign banks have been and is through the unremitting efforts to actively enter and participate in China’s economic and financial life.China has joined the WTO, in the long term, according to the market access and national treatment principles, the treatment of foreign banks in China will change. On the scope of business, foreign banks will enjoy the same treatment as the domestic banks, because of the principle of national treatment. On the institutional setup, there will be more and more foreign banks and their branches get into China and set up a business institution. On the regional restriction, China will eventually eliminate geographical restrictions.The development of foreign banks growth has a positive meaning on China’s economic. First of all, the development of foreign banks bring the "catfish effect" to promote the domestic banks in China to raise their level of financial services and increase the varieties of service, also reduces the high operation cost and high profits maintained by domestic banks in China because of monopoly. Secondly, the development of foreign banks in our country bring the funds required for the economic growth in China, also make up for the shortage of domestic savings. Also improved the distribution of resourcein our country, promoting China’s economic growth. Finally, the development of foreign banks in China brings the technology innovation for China’s economic growth.This article used Financial Analysis and Data Envelopment Analysis (DEA) model,based on the existing research on commercial bank efficiency, combined with the characteristics of foreign banks, using the29foreign banks’data from2009to2012to analyze these foreign banks’efficiency and the factors that influenced the efficiency. Through the analysis on the performance of various foreign banks, this article offered some suggestions for the foreign Banks operating in China to promote efficiency.