Finance, as its name implies, is financing, which is generally interpreted in the dictionary as all activities related to currency circulation and bank credit, such as currency issuance and withdrawal; Deposits and loans; Issuance and trading of securities; Gold, silver and foreign exchange transactions; Payment and settlement; Insurance, trust, lease, etc. When it comes to finance, magnificent bank buildings may appear in our minds, reminding us of advertising words such as "buying a house to find a bank" and "traveling around China with one card in hand". In modern society, finance is like a virtual purse, which provides people with various financial facilities all the time and keeps pace with people's lives. Whether saving money or buying national debt, buying foreign exchange or paying wages, people will deal with financial institutions such as banks and securities companies, and will be exposed to financial instruments such as money orders, traveler's checks and credit cards. Especially in recent years, with the change of people's consumption concept and the improvement of income level, it has gradually become fashionable to find a bank loan to buy a house and a car. People have a further understanding of the function of finance and their dependence on finance has deepened. Ordinary people can't live without finance, let alone enterprises. In the process of production and operation, enterprises generally need to establish financial relationships with financial institutions such as fund lending, guarantee, discount, payment, insurance, securities issuance and underwriting. Life without finance is simply unimaginable. What is the essential attribute of finance? Different subjects stand in different angles, and their descriptions of things or phenomena are often different, with different emphases. The same is true of the understanding of finance. For example, if a country looks at finance from the overall perspective of economic development, it will come to the conclusion that finance is the core of modern economy. The so-called "a game of chess, everything is born"; After the Asian financial crisis, the heads of government of many countries realized the strategic significance of finance for national survival and development, and pointed out that finance is an important resource affecting national economic security, and the purpose of developing finance is to provide inexhaustible motive force for the stability and sustainable development of the national economy; In the eyes of economists, finance is a means of resource allocation, which transfers purchasing power between surplus and shortage units on the basis of repayment; In the eyes of jurists, finance is an indispensable game rule for the efficient operation of society, and whether finance is developed or not is an important symbol of the degree of social civilization and the soundness of the legal system. As mentioned above, finance is closely related to the lives of ordinary people. So, in layman's terms, what is finance? I think, generally speaking, finance is a paid financial service provided by financial institutions to the public. The author's deep feeling about the financial significance comes from a financial scholar who came back from America. This scholar once talked about two things that impressed him most in the United States: one was the argument between two loan officers, arguing whether the bank's credit work should be oriented to the south or the north. One person advocates that the credit work should face south, and thinks that "sending umbrellas in sunny days and collecting umbrellas in rainy days" is a management secret hidden in the hearts of credit personnel. Another person objected, citing many counterexamples to refute, pointing out that "standing for a while to borrow money, kneeling for a lifetime to collect debts." In fact, whether the credit work faces the south or the north is essentially an active and passive position of the credit work. Another thing is a conversation about a group of sculptures: this scholar once went to the First Bank of Chicago to do business. As soon as he stepped into the lobby of the bank, he was attracted by a group of colorful sculptures in the lobby: a gentleman stood with a hat in his left hand and a crutch in his right hand, full of pride and scenery; While facing his other one, he knelt on his knees, put his hands in the air, and his pleading eyes were full of expectations for charity. The scholar thought to himself and asked a bank clerk with a grain of salt: "Do you think my understanding of this group of statues is correct? Banks are the owners of funds, and customers are the representatives of fund demanders and users. In the market of commodity economy, everything will be fine if you have money, so it should be bankers standing; In order to borrow money, customers, no matter how old the boss is, sometimes have to beg in front of bankers, that is to say, people kneeling represent customers. Who knows that the bank clerk smiled and said, "On the contrary. Bankers are kneeling, customers are standing, and bankers are begging customers to pay their debts. "Later, he explained that the bank's credit work is based on risks and interests, and there is no permanent initiative. Although you can seek legal protection in a passive situation, it is often helpless to resort to the law, so the banker becomes a beggar. From this, we can realize the service attribute of finance. Financial institutions, represented by banks, do it at sunrise every day and rest at sunset. Their business is nothing more than providing a financial service to our customers. The basic income that the financial industry depends on is the spread of deposits and loans, and the banks are supported by various customers who provide deposits and loans to banks. In other words, the customer is the God who enjoys the service. Since finance is a service, the income largely depends on the quality of the service, the evaluation of the consumers who enjoy the service and the face of the consumers. In this sense, if China's financial practitioners are not clear about their own position, do not adjust their mentality in time, still operate passively with God's dream in the planned economy era, and do not take the initiative to attack and innovate in the market economy environment, they are bound to be abandoned or forgotten by the real God-the people. If the sense of crisis in China's financial industry has existed only on paper and in theory for a long time (in real life, it is more of a sense of superiority), then after China's entry into WTO, this sense of crisis has been deeply rooted in people's hearts due to the fierce competition and inevitable cruelty. The WTO is mentioned here. What is WTO? What does it have to do with finance? What impact will China's entry into WTO have on China's financial industry and the lives of ordinary people? These problems are generally concerned by the people, but they are not clear. The following author makes a little explanation on this. WTO, the abbreviation of the World Trade Organization, is a global trade organization that comprehensively regulates and adjusts the trade policies and trade relations of all countries in the world today, with the aim of eliminating discriminatory treatment in international trade and promoting trade liberalization. WTO rules are a system of rules to adjust the foreign trade policies, systems and behaviors of member governments. The international trade regulated and adjusted by WTO law includes not only the transnational transactions of tangible goods that we are familiar with, but also the transnational transactions of intangible technologies and services. Thus, the relationship between WTO and finance is established, that is, finance as a service (called "financial service") is brought into the jurisdiction of WTO law. In other words, the jurisdiction of the WTO has involved a sensitive industry-financial services, which has long been monopolized by the state. The financial service under the WTO system refers to any financial service provided by a member's financial service provider (such as intermediary financial institutions such as banks and direct financial institutions such as securities companies), covering a wide range of financial fields such as banking, insurance, securities and financial information services. There are four main ways to provide financial services under WTO rules: cross-border provision, consumption abroad, commercial presence and personnel mobility. Cross-border provision of financial services refers to the provision of financial services from the territory of one member to the territory of other members, such as a bank of one country providing loans to customers in another country or absorbing deposits from customers in another country; Financial services consumption abroad refers to providing financial services to service consumers of any other member within the territory of a member, such as a bank of a country providing credit card services to foreigners; The commercial existence of financial services means that service providers provide services by setting up institutions in the country where consumers are located, including setting up offices, branches and subsidiaries. This is one of the largest and largest international financial services at present, and the financial services provided in this way account for more than 70% of the total international financial services trade; The movement of financial service personnel refers to the provision of services by a member's financial service provider in other contracting parties. The provider of such services comes from another country, but has no commercial presence in the receiving country, such as providing financial consulting services, risk assessment and the flow of senior managers of multinational banks. Due to the sovereign sensitivity of financial services and their important role in a country's economy, financial services have long been under the exclusive jurisdiction of domestic laws of various countries, and each country has the right to decide whether and how to open its own financial services market to other countries. Nowadays, WTO has established a multilateral system of financial services trade through multilateral treaties such as General Agreement on Trade in Services, Appendix on Financial Services, Understanding on Financial Services Commitment and its supplementary documents, requiring member countries to gradually open the financial services market, fulfill their treaty obligations such as granting MFN treatment and national treatment to foreign financial service providers and the financial services they provide, and publishing relevant domestic laws, regulations and administrative measures. As we all know, it has been more than two years since China joined the WTO. What does joining WTO mean to China's financial industry? It means "the wolf is coming", which means "dancing with the wolf" before 2006. As a member of the WTO, China must fulfill its obligations under the WTO treaty, follow the WTO rules on the liberalization of trade in financial services, gradually open the financial services markets such as banking, securities, insurance and trust to the outside world, and fulfill a series of specific commitments made by China in terms of financial market access and national treatment for foreign-funded financial institutions. These commitments include: allowing foreign banks to engage in RMB business of Chinese-funded enterprises within two years after joining the WTO; Cancel all geographical restrictions and customer restrictions on foreign banks within five years; Within five years, cancel all existing non-prudential measures that restrict the ownership, operation and establishment of foreign banks, as well as their branches and licenses, and so on. Some promises are being fulfilled at present, and some promises have only a short transition period of two or three years and will be fulfilled soon. Taking the banking industry as an example, with the gradual opening of the financial services market, the number of foreign banks that have rushed to China in the past two years has been increasing, and the geographical scope, customer scope and business scope have been expanding. The overall competition between domestic and foreign banks is inevitable. Not to mention that most foreign banks in China have strong financial strength, rich financial products, advanced technical equipment, mature management experience and good service awareness, as well as stronger ability to resist risks and expand business. As far as the present situation of Chinese banks is concerned, the high amount of non-performing assets makes Chinese banks face huge credit risks, which directly threatens their survival and development. For example, the average non-performing asset ratio of international banks is generally only about 3%, while the non-performing assets of banks in China are several times the net assets. In 2000, the proportion of non-performing loans of the four major state-owned commercial banks in China was as high as 40%, which was 2.2 times of the fiscal revenue of that year. On the basis of such internal and external troubles, the invasion of foreign banks and the survival crisis faced by Chinese banks can be imagined. Therefore, for China's financial industry, joining the WTO can be described as a torrent and a shoal, sailing against the current, or retreating. China's financial industry has no choice but to actively prepare and fight. Of course, dialectically, this is not a bad thing. Isn't there a saying that "after death, we must die"? Joining WTO means a severe challenge to China's financial industry, but on the contrary, it means good news, which means that there will be more and better financial products to choose from and better and cheaper financial services to enjoy. Have you noticed that in the past two years, more and more financial enterprises have participated in market competition, including state-owned, private, Chinese-funded and foreign-funded; All kinds of financial enterprises are striving to strengthen management, improve efficiency, optimize services and strive for characteristics in order to attract more customers and meet their different needs. Therefore, the financial products supplied in the market are more and more diversified, and the financial services provided are more and more personalized. Foreign exchange treasure, online banking, ATM, financial supermarket and other new products and services are unheard of in the past, but now they are no longer rare. They are as common and ordinary as residential quarters, bringing you convenience that I can see. In addition, with the opening-up effect brought by China's entry into WTO, the geographical scope of financial services that ordinary people can enjoy is bound to become wider and wider. This is because China's accession to the WTO can achieve a win-win situation: on the one hand, more and more foreign financial institutions are allowed to enter China, and in order to gain a competitive advantage, their overseas resources and networks in technology, products and services are increasingly open to China consumers; On the other hand, China's accession to the WTO is also conducive to the overseas expansion of China's financial institutions. As a member of the WTO, China can also enjoy the rights and treatment given by the WTO rules when fulfilling its obligations under the WTO rules according to the principle of reciprocity of rights and obligations. While opening its financial market to the outside world, China can also enjoy the market access, national treatment and most-favored-nation treatment granted by other WTO members to China's financial industry, which is conducive to the penetration of China's financial institutions overseas, the establishment of overseas institutions, the expansion of business, and the creation of China's international big banks and securities companies, thus creating conditions for the transnational development of China enterprises and providing a broader space for China people's financial consumption. This is not the future, not a dream. A report the other day confirmed this fact. It is reported that a famous symphony conductor became the first credit card user of Shanghai Pudong Development Bank on February 4, 2004. This dual-currency credit card is the first dual-currency credit card in Chinese mainland approved by the People's Bank of China, China Banking Regulatory Commission and other regulatory authorities at the end of 2003, and managed and technically cooperated by foreign banks (namely, the world's largest Citigroup). The card is settled in RMB and USD respectively, including gold card and ordinary card. 300,000 merchants in China and more than 20 million merchants around the world can use it. It will provide a wide range of functions and preferential items, such as "shopping protection" and "travel inconvenience protection" provided by insurance institutions for the first time in China. Gold card holders can also enjoy the world's largest preferential card use plan provided by Citigroup, and obtain franchise rights when more than 6,543,805 merchants sign accounts around the world. [i] It can be seen that China's accession to the WTO has played a "window of the world" role for the development of China's financial industry and the lives of ordinary people, and has effectively promoted the maximization of the financial welfare of ordinary people. Its far-reaching influence will continue in our lives, let us wait and see.