Impacts Of Foreign Banks' Entry On The Performance Of Chinese Banks

Before the 1990s,financial markets in various countries were relatively closed.Since the 1980s,with the deepening of financial liberalization in various countries,especially after the 1990s,foreign banks began to set up branches in host countries.Chinese financial market reform began in the late 1970s.After 30 years of reform,Chinese financial market has been gradually improved.China's restrictions on foreign-funded banks have also been gradually liberalized.In particular,the scale of foreign-funded banks in China has expanded dramatically since the implementation of relevant laws in 2004.In 2007 China fulfilled her WTO commitments and liberalized some foreign-Restrictions.A large number of foreign banks have been emerging since then.It has been more than 30 years since the entry of foreign banks into China.With the entry of foreign banks,the debates on the impact of foreign banks on the performance of Chinese banks have been going on for more than 30 years.The academic circles at home and abroad also have the debates.There is no theoretical basis for this study,which can only qualitatively analyze the positive and negative impacts of foreign bank entry on the performance of the host country.More scholars use quantitative data.This paper analyzes the impact of foreign banks' entry into the host country's banking industry.Since the development of banks in different countries and regions is not the same,data from different countries often reach different conclusions.Domestic scholars use different periods of data to study the impact of foreign capital on the performance of China's banking industry.The conclusions are not the same.Even when using the same period of data using different methods of research,the conclusions are often not the same.Some empirical studies have shown that foreign banks have a positive impact on the performance of Chinese banking industry.Some empirical studies show that the impact of foreign banks on Chinese banking industry performance is not obvious,and some empirical studies show that the entry of foreign banks can have a negative impact on the performance of Chinese banking industry.On the basis of previous studies,this paper puts forward the hypothesis that the entry of foreign banks has a significant positive effect on the profitability of Chinese banking industry.In this paper,China's banking industry data from 2003 to 2015 were analyzed by using least squares regression analysis with EViews software,and then the results were analyzed.This paper proves that the entry of foreign banks can significantly improve the profitability of China's banking industry through empirical research.