Analysis:

Financial opening has made China gain great benefits in attracting foreign investment and promoting economic growth. In the long run, gradually expanding financial openness and eventually integrating into the global financial system will not only enable China to continue to obtain these benefits, but also help accelerate the reform and development of the domestic financial industry and enhance its international competitiveness. At the same time, however, it should be noted that the integration is based on an all-round and highly open policy, and this process will inevitably make China's banks, insurance and securities industries face increasingly fierce international competition in the domestic financial market, which will have a direct impact on the business, talents and management of China's financial industry, and will further pose new challenges to China's macro-financial regulation and financial supervision. Therefore, for China financial industry, global financial integration is both an opportunity and a challenge.

Impact on the banking industry

In the long run, China's banking industry will gain a variety of benefits from its gradual integration into the global financial integration process. If it helps to reduce the restrictions of China's banking industry in the international market, it will also help domestic banks to expand overseas business and realize transnational operations. In addition, the biggest benefit is also reflected in the system reform and system innovation. On the one hand, financial integration means that China's banking industry will face strong competition from international banks with sufficient financial strength, advanced management and efficient service, which will help to strengthen the pressure and motivation of China's banking reform and development from the outside and accelerate the reform and modernization of China's banking industry; On the other hand, it also means that the supervision mode of China's banking industry, including the central bank, must be in line with international standards, which is conducive to promoting the standardization of banking reform in China.

But in the short term, even in the short term, this integration is not without cost. The present situation of China's banking industry is that although great progress has been made after more than ten years of reform and opening up, the ultimate goal of the reform and development of the banking system is far from being realized, and many deep-seated institutional problems such as low degree of commercialization, distorted incentive mechanism, weak innovation ability and high proportion of non-performing assets have not been fundamentally solved. Many aspects are far behind the international advanced level. The market competition under the big gap will inevitably bring negative effects to state-owned banks.

It can be predicted that once the existing protection measures are cancelled, the domestic banking industry will be in a very unfavorable competitive position:

First of all, it is inevitable to open RMB business of China enterprises to foreign banks. Due to the low capital cost, strong loan development ability and high loan quality of foreign banks, a large number of high-quality customers with good efficiency and high credit rating may be transferred to foreign banks, while customers with poor efficiency and low credit rating and some policy businesses remain in domestic banks, resulting in "adverse selection" phenomenon. This can be regarded as the biggest threat to Chinese banks.

Secondly, restrictions on foreign exchange business will be gradually lifted. Relying on the advantage of raising low-cost funds through the international market, foreign banks can provide foreign exchange loans to domestic customers at lower interest rates, thus highlighting the advantages of their foreign exchange business and having a greater impact on the foreign exchange business of domestic banks.

Third, the geographical restrictions on RMB business will eventually be lifted. At present, foreign banks in China are mainly distributed in big cities and coastal cities, and Shanghai, Shenzhen and Beijing alone account for 70% of the total number of foreign banks in China. With the relaxation of the geographical restrictions of RMB, foreign banks will expand to more coastal cities and strengthen the competition for quality customers.

Fourth, foreign banks will be in a monopoly position in opening up other financial services. Foreign banks have absolute advantages in financial data processing, consulting services and mixed operation. They are familiar with the international financial field, analyze the international financial situation for a long time, pay attention to market development, have rich market competition experience, have strong technical and financial product development capabilities, and can provide excellent services, especially in the personal credit system. Therefore, foreign banks will be in a monopoly position in providing other financial services.

Finally, in order to explore the domestic market, foreign banks will attract a large number of excellent management and professional talents in the domestic banking industry, which will have a certain impact on the operation and management of domestic banks.

The above competition pattern will definitely have a great impact on the domestic banking industry:

First, the loss of market share. We can make a simple estimate based on China's accession to the WTO. It is predicted that the market share of foreign currency deposits of foreign banks will rise to 15% five years after China's entry into WTO. The market share of RMB deposits will rise to 5% to 10% (Gong Zhankui, 2000; Wang Xuebing, 2000); Its foreign currency loan market share can exceed 1/3, and the RMB loan market share will reach about 15%. The market share of intermediary business is likely to exceed 50%; Foreign banks will gain market share in most financial derivatives trading business and investment banking business. Ten years later, foreign banks will account for 65,438+0/3 of the whole banking market (Wang Xuebing, 2000).

Second, the profitability has declined. With the shrinking market share of Chinese banks and the decrease of high-quality customers, their profitability will inevitably decrease, which will eventually affect the income of Chinese banks. If we consider that banks in China, especially state-owned commercial banks, also bear heavy historical burdens, this situation will put banks in China in a very dangerous situation.

The third is to affect the liquidity of Chinese banks. The gradual diversion of funds from Chinese banks to foreign banks will inevitably have an adverse impact on the liquidity of Chinese banks. In view of the high proportion of non-performing assets of Chinese banks, especially state-owned commercial banks, liquidity loss will not only worsen the risk situation of domestic banks. It may even pose a threat to the survival of banks in China.