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 wedgeing system began in animated in 1998 and argon accelerating rapidly as the approach to the being Trade Organization (WTO) become true. This pace reflects the intentness 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 study technology, high-octane processing and superior forethought expertise with commercialise 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 result competition represents the opportunity and challenges the domestic banks face. Facing challenge, Chinas banking industry mustiness be recognize that managing inherited nonperforming loans (NPLs) and overcoming antiquated business models, policies, procedures , systems and home are critical to meeting the demands of an increasingly competitive market. This entering accounts on the most(prenominal) popular failing 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 natural depression profitability NPLs are know as one of the most serious balance-sheet problems facing Chinese banks in recent years, all the same the exact figure of replete(p) NPLs in Chinas banking sector is still unknown. In 1999,the authorities proposed a solution of debt-to-equ ity swap to deal with this issue, i.e., to ! depict asset management companies (AMCs)to take over the existing NPLs of quaternion wholly-state-owned banks, and to let AMCs to determine NPLs as far as viable ,with AMCs acting in the main as owners of equity assets. In 2000, the upper limit for the 4 AMCs to take over NPLs from the four banks was set at 1.3 one thousand million Yuan, which was alike 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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