The comparison of banking performance between China and Taiwan
Lee, Tsai Ju
Hwang, Jen Te
Lee, Tsai Ju
China's banking system
China's WTO commitment
Global Financial Tsunami
|上傳時間: ||2011-10-05 11:59:59 (UTC+8)|
After thirty years of economic and financial reforms, banking system in China has transformed from rigidly controlled to marketization nowadays with a variety of banking institutions coexist in the financial market. Among different kinds of banking institutions, large state-owned commercial banks dominate over half of total banking assets, their huge scale allow themselves to have leading positions and monopoly power in China’s banking industry.
Under WTO regulations China must fully open markets for foreign banks’ investment started on December 11, 2006, before that most large state-owned commercial banks have restructured into joint-stock companies and went public sequentially in order to enhance competition for fierce challenges brought from foreign banks. Attributing to China government’s effort and support, the overall domestic banking performance has made a lot of progress in the past few years.
By comparing banking performance with USA and Taiwan in four aspects of profitability, assets quality, liquidity risk management and capital adequacy ability, the study results demonstrate that general performance of banking sector and large state-owned commercial banks in China have improved greatly and even better than advanced countries in some respects.
The signing of ECFA between cross-strait governments on June 29, 2010 starts a new page of Taiwan banks’ development in China, the study suggests that in the initial stage banks from Taiwan can explore markets of corporate banking by using their expertise in loans for small and medium enterprises which are always neglected by banks in China, and by providing services to Taiwan business people in China to explore markets of consumer banking, and then gradually expand market share.
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