Chinese Commercial Bank Asset Quality Correlation With Economic Growth

With China’s accessing to WTO and gradually opening up the domestic market, while the global financial crisis on China’s commercial banks has also brought some impacts. China’s economy is faced with a critical period of reform, from the first few decades of rapid development gradually turned to smoothly. In the case of the current mcroeconomic is declining, the major listed banks to disclose annual NPL ratio has pressure of increased, The reform of China’s economic and commercial banks is imminent, research on this topic is not only theoretical but also has a very important practical significance.This article summarizes the literature and the combination of Fisher’s "Debt-crunch theory", financial instability hypothesis and mathematical analysis of the current pro-cyclical correlation between commercial banks’ asset quality and economic growth. This paper selects the quarter of 2004 and 2014 a total of 42 datas, studying variables for commercial banks of non-performing loan ratio of total fixed assets investment of the whole society, the total retail sales of social consumer goods, total imports and exports as well as the money supply M2. Text of this article will use the chart analysis, principal component analysis, binary regression model to study the following two questions:1.non-performing loan ratio of commercial banks and the number of variables of macroeconomic growth’s relationship, the paper used the principal component analysis, binary regression methods; 2.commercial banks non-performing loan ratio to macroeconomic growth’s inflution, using binary regression methods.Finally the article in a comprehensive theoretical knowledge and empirical analysis, and recommendations are given with reference to both the government and the commercial banks to improve asset quality of commercial banks, improving the management of commercial banks and making the economic growth smoothing.