Facing the WTO Accession: Strengthen China's Banking Industry ----From the Evidence of Chinese Banking Problems

Introduction chinawares ambitious efforts to reform and restructure the curseing system began in animated in 1998 and argon accelerating rapidly as the admission fee to the being Trade Organization (WTO) become true. This pace reflects the diligence diversity that WTO membership promises as restrictions are removed and Chinas banks are subjected to great disputation from foreign institutions with developed skills and capabilities, advanced knowledge technology, high-octane processing and superior forethought expertise with market economies. consort to an industry source, the lending business in China is expect to grow by 40% annually in the decennary after entry into the WTO. This tremendous potential and turn up competition represents the opportunity and challenges the domestic banks face. Facing challenge, Chinas banking industry must(prenominal) be recognize that managing inherited nonperforming loans (NPLs) and overcoming antiquated business models, policies, procedures, systems and alkali are critical to meeting the demands of an increasingly competitive market. This composure accounts on the nearly popular flunk that exists in the bank industry and offer a systematic recommendations to improve it . 1.0 The weakness of Chinese banks 1.

1 Non-performing loans, weak capital base and small-scale profitability NPLs are know as one of the most serious balance-sheet problems facing Chinese banks in recent years, up to now the exact figure of replete(p) NPLs in Chinas banking sector is still unknown. In 1999,the authorities proposed a solution of debt-to-equity swap to deal with this issue, i.e., to erect ass! et management companies (AMCs)to take over the existing NPLs of quartetsome wholly-state-owned banks, and to let AMCs to determine NPLs as far as come-at-able ,with AMCs acting in the main as owners of equity assets. In 2000, the upper limit for the four AMCs to take over NPLs from the four banks was set at 1.3 one thousand million Yuan, which was analogous to about 15 percent of chinas GDP. If you want to foreshorten a full essay, order it on our website: OrderCustomPaper.com

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