There are three opportunities for foreign banks to develop in China: first, after China's entry into WTO, China will fulfill its promise and gradually relax restrictions on customers, businesses and regions; Second, with the advent of interest rate marketization and the further relaxation of financial control, the possibility and feasibility of foreign banks increasing their income through non-traditional credit business in China market have greatly increased; Third, China encourages foreign banks to participate in Chinese banks. With these three opportunities, foreign banks have made great progress in China. The details are as follows:
The number of 1. continues to increase, the business scale continues to expand, and the operating conditions continue to improve. By the end of 2004, 62 foreign banks from 19 countries and regions had set up 204 business institutions in China. Take Shanghai as an example. By the end of March 2005, the total assets of foreign banks were 342.34 billion yuan, up 38.4% year-on-year, accounting for 12.8% of the total market, up 2.2 percentage points. The balance of local and foreign currency loans reached 65.438+0659 billion yuan, with a year-on-year growth rate of over 50%, accounting for 654.38+00.6% of the total loan market in Shanghai. From June to March, 2005, foreign banks realized an operating profit of1.70 billion yuan, a year-on-year increase of 46.8%.
2. The breadth and depth of shareholding in Chinese banks are increasing. In the past year, the four major state-owned banks in China have successively started the shareholding system reform, one of which is to introduce overseas strategic investors. Joint-stock banks with more flexible mechanisms are accelerating their opening up. By the end of 2005 10, * * 19 overseas financial institutions had invested in 16 Chinese banks, with a total investment of nearly16.5 billion US dollars. At present, the shares held by foreign investors have accounted for 15% of the total assets of Chinese banks.
3. The scope of entry gradually spread from Beijing, Shanghai and Shenzhen to the mainland. At present, the economically developed areas, mainly Beijing, Shanghai and Shenzhen, are still the first choice for foreign banks to enter China, and continue to extend to the Bohai Rim, Yangtze River Delta and Pearl River Delta areas centered on Beijing, Shanghai and Shenzhen. With the implementation of the strategy of encouraging foreign-funded financial institutions to develop and revitalize the old industrial base in Northeast China and the deepening of financial support policies, China's financial services will continue to expand to the outside world, and the geographical distribution of foreign-funded banks will continue to extend to the central and western regions after entering China.
4. RMB business is gradually increasing. By the end of 2004, 105 foreign-funded banking institutions had been allowed to operate RMB business, of which 6 1 were allowed to operate RMB business of Chinese-funded enterprises. Starting from 12 and 1, China will further open RMB business in Kunming, Beijing and Xiamen on time, and Xi 'an and Shenyang will open one year ahead of schedule.
5. RMB business is mainly based on deposits and loans. Foreign banks focus on deposits and loans, and settlement tends to be active. The source of RMB not only depends on the deposits of foreign-invested enterprises, but also makes full use of market mechanisms such as interbank loans to raise funds, which basically meets the demand for credit assets. According to the industry forecast, the loan amount of foreign banks in Chinese mainland will increase by 40% every year, and the proportion of foreign banks in the total loan amount in Chinese mainland will reach 8% by 20 10.
Second, the advantages of foreign banks
First, the financial strength is strong. The asset scale and profit scale of these banking giants are unmatched by domestic banks. For example, Citibank's total assets exceed the sum of the four state-owned commercial banks in China, and its pre-tax profit exceeds the sum of the four state-owned commercial banks in China by nearly 10 times.
Second, good asset quality and strong profitability. The NPL ratio of state-owned banks in China is quite high, around 28%, which is rare in the world.
Third, it has organizational management advantages and strong anti-risk ability. Foreign banks have been integrated into the international financial market for many years, with rich operating experience, providing a variety of financial services and being able to quickly adapt to market demand.
Fourth, the hardware and software equipment are excellent, and the products are high in science and technology.
Fifth, enjoy super-national treatment in many fields. In terms of paying profits and taxes, the total burden of Chinese banks exceeds 70%, while the comprehensive tax rate of foreign banks is only about 30%; In terms of purchasing equipment, Chinese banks need to spend money from after-tax profits and need the approval of their superiors, while foreign banks are very flexible; In terms of business scope, foreign banks can do foreign currency investment business.
Sixth, the management mechanism is flexible and full of vitality, which is more suitable for the increasingly flexible reality of market economy. At present, the system of China's commercial banks is not perfect, and there is no effective modern enterprise system and corporate governance structure. The management system to meet the needs of the market is being formed and improved.
Seventh, universal banks, that is, banks, securities and insurance are generally mixed, while domestic banks cannot fully participate in securities and insurance business due to national policy restrictions.
Eighth, it can provide customers with a variety of financial products and has the leading financial innovation ability. All these advantages are due to the long operating history, profound market-oriented operation experience and high-quality financial management talents of foreign banks.
Compared with foreign banks, domestic banks have many gaps in asset scale, asset quality, profitability, management experience, operation mode and innovation ability, and these gaps can only be gradually made up by China's own banking reform.
Third, the influence and problems brought by the entry of foreign banks to China's financial industry.
Undeniably, the entry of foreign banks provides a rare opportunity for the development of China's financial industry: it brings modern operating mechanism and advanced management mode; Can bring advanced financial products and better financial services; It is helpful to deepen financial reform and improve the overall quality and competitiveness of financial enterprises in China; It is beneficial to the internationalization of China's financial enterprises and the introduction of foreign capital, but this cannot be achieved in a short time. However, the entry of foreign capital will inevitably have a greater impact on the domestic financial industry. Although the domestic banking industry cannot be completely annihilated, the challenges it faces are considerable, mainly as follows:
First of all, the banking industry in China will lose its superior customer resources more and more, which will have a serious impact on its profitability. The profits of banks mainly come from high-quality customers, while foreign banks focus on those high-quality customer resources. And those excellent customer resources are mainly concentrated in big cities with developed economies. Because those economically underdeveloped areas don't have much profit to dig, which is not their key consideration. Recently, several large enterprises "defected" and switched to foreign banks, which fully illustrated this point. The final result is likely to be that foreign banks have eaten "fat meat" and left only "bones" for state-owned banks.
Second, the entry of foreign banks will lead to the diversion of deposits. If this deposit diversion exceeds the psychological warning line of China residents, it will inevitably make domestic depositors pose a threat to the credit of domestic banks. The experience and lessons of the international financial crisis remind us that even with the backing of national credit, when residents' psychological defense line collapses, it will also trigger a large-scale currency crisis.
Third, the entry of foreign banks has brought competition in all aspects. First of all, the competition for talents will lead to the outflow of outstanding human resources with high financial professional skills, excellent customer resources and interpersonal networks in domestic banks, thus causing a shortage of outstanding talents in Chinese banks. Secondly, the competition of customers. The customers that foreign banks strive for in China mainly include corporate customers, institutional customers and individual customers. Professionals point out that 20% customers of banks can often bring 80% profits or market share to banks. There is also the competition between products and services. The entry of foreign banks will inevitably lead to a large loss of intermediary business, international settlement business and foreign exchange business in China. Finally, the competition in the market. Capital market, money market, capital market, foreign exchange market, syndicated loan market, e-commerce market and coastal market are all markets that foreign banks strive to occupy.
Fourth, increase the difficulty of China's financial macro-control. After relaxing the business restrictions of foreign banks on local currency and foreign currency, it will be more difficult for the central bank to accurately define the total amount of money and credit, because foreign banks can offset the effect of monetary policy by financing in the international financial market, thus weakening the central bank's ability to formulate and measure monetary policy objectives and weakening the effect of monetary policy. Moreover, the entry of foreign banks will increase the difficulty of industrial regulation of foreign capital, and to some extent, some industries where foreign capital is concentrated will lose control. With the development of economic and financial globalization and the entry of foreign banks, China's financial system will face more and more external shocks. Fluctuations in international financial markets and foreign financial institutions in China may increase the operational risks of the financial system. If China's financial supervision authorities fail to supervise, it will increase the instability of China's financial system.
Fifth, it has brought new problems to China's financial supervision. On the one hand, with the rapid development of financial innovation in the international financial market and the strengthening of the comprehensive and all-round trend of international banking, the existing banking supervision system, methods and means in China will be difficult to adapt, and there will be many regulatory vacuums in banks, and the effectiveness of supervision may be greatly weakened; On the other hand, the entry of foreign banks will bring many unfamiliar financial products and tools, and how to effectively supervise these unfamiliar businesses is also a brand-new topic. In addition, because the headquarters of foreign banks in China are registered overseas, it is sometimes difficult to rely solely on the supervision of the Bank of China, which involves new issues such as how to strengthen international financial supervision and cooperation. In the course of operation, foreign banks will have some problems, such as insufficient working capital, transferring domestic funds abroad for arbitrage, underpaying or missing deposit reserve, and transferring profits to avoid illegal operation beyond the tax scope. The entry of foreign banks will also bring foreign financial risks into the domestic financial market, aggravate the transmission of fluctuations in the international financial market and increase the difficulty of preventing financial risks.
Fourth, some thoughts and suggestions.
Judging from the course of world financial opening, the host country is more cautious about the entry of foreign banks. But on the whole, they all focus on encouraging foreign banks to enter legally and effectively supervise and invigorate the financial industry under the principle of prudence and prudence. This also has some implications for China's financial industry:
1. Strengthen market supervision, establish business management monitoring system and improve financial laws and regulations system. At present, China has not yet formed an effective supervision system and operational mechanism for the management of foreign banks. With the increasing number and scale of foreign banks, some regulations on foreign banks in the past have been difficult to adapt to the new situation, and some loopholes have become tools for foreign banks to use, which is obviously unfavorable to domestic commercial banks and China's financial industry. Therefore, we should strengthen market supervision, establish a business management monitoring system and improve the supporting financial laws and regulations system. A series of financial laws and regulations should be constantly improved and developed in the process of implementation, so as to better safeguard the stable and healthy development of China's financial system and connect with international rules. Through the application of information technology, the cross-border capital flow is monitored at a fixed point, at a fixed time and in the whole process, so as to enhance the scientific and effective supervision of the banking supervision department. At the same time, we should establish a corresponding early warning mechanism for financial emergencies to safeguard China's financial security.
2. Improve financial supervision and ensure its effectiveness. In order to adapt to China's financial opening and promote financial development, a unified financial supervision system should be established. Taking the opportunity of financial integration and the establishment of financial holding companies, we should establish a unified financial supervision system, establish a unified financial supervision institution covering banking, securities, insurance, trust and other financial businesses, effectively allocate existing scattered financial supervision resources, gradually solve the problems of overlapping and lack of supervision, improve the effectiveness and comprehensiveness of supervision, promote the innovative development of financial services, and promote the stable operation of the financial system. Focus on strengthening and improving the supervision of transnational banks, capital adequacy ratio, financial derivatives and interest rate risks. Financial intermediation between the banking industry and other financial industries is also inevitable. The history of the financial crisis proves that the current separate supervision system of China's financial industry can neither be immune to the impact of the whole financial industry, nor will it have no impact on other financial departments in its own crisis. Therefore, in order to solve the challenges faced by different regulators in China, bank regulators must cooperate with other financial regulators to reduce the cost of supervision and ensure the effectiveness of financial supervision.
3. Improve the regulation level of the central bank's monetary policy and maintain the healthy development of the financial industry. When foreign banks enter China, their business scope, management innovation, operating mechanism, merger and reorganization are very different from the micro-financial basis of previous supervision, which puts forward new requirements for the central bank's monetary policy regulation. Special attention should be paid to the following aspects: in principle, it is necessary to make full use of the external reform power brought by foreign banks to improve the overall efficiency and competitiveness of China's banking industry, and to prevent excessive competition brought about by the entry of foreign banks; We must distinguish between financial innovation and illegal operation of state-owned commercial banks in the supervision content; In the way of supervision, compliance supervision and off-site inspection are the main ways; In terms of supervision efficiency, there should be clear time limit requirements; In terms of supervision, we truly follow the principle of national treatment and treat Chinese and foreign banks equally.
4. Vigorously develop intermediary business and international market business. Judging from the composition of the total income of the four wholly state-owned banks in China, most of the income is interest income, and the income from intermediary business and international business accounts for a very small proportion. However, large foreign banks often attach great importance to the development of these two businesses. Therefore, we should recognize the importance of intermediary business and international business, establish a strict, scientific and effective assessment system for intermediary business and international business management, and promote the development of intermediary business and international business.
5. Implement the talent development strategy. The competition in the financial industry is, in the final analysis, the competition for talents. Whoever has the talent advantage will have the competitive advantage. Therefore, to strengthen the cultivation of financial talents, it is more important to retain talents; It is necessary to strengthen the construction of corporate culture and enhance cohesion and sense of belonging; It is necessary to establish a talent development and incentive mechanism that conforms to the laws of market competition, establish relatively stable and sustainable human resources, and effectively develop and allocate systems; At the same time, a set of technical indicators and scientific management system for effective measurement and performance evaluation should be established.
China's entry into WTO has provided external incentives and development impetus for China's banking reform. The entry of foreign banks has also brought additional competition to China's banking industry, which may cause financial risks to some extent. But in the long run, it will play a positive role in improving the overall quality of China's banking industry, adjusting its property rights structure and market structure, providing a rare reference system and competitors for China's banking industry, and playing a role in demonstration, encouragement and communication. It will further promote and strengthen the contact and cooperation between China's banking industry and foreign banks, and prosper China's financial market through market complementarity. Therefore, we should take effective measures to foster strengths and avoid weaknesses, give full play to the role of foreign banks in promoting China's banking and monetary policy, avoid and reduce their impact on China's banking and monetary policy, and promote the sustained, rapid, stable and healthy development of the national economy.