I. Development Status of China's Financial Service Industry In recent years, with the deepening of financial reform and opening up, the market environment faced by China's financial industry has been greatly improved, especially since the 1997 Southeast Asian financial crisis, governments at all levels have placed financial security and steady development in a very important position, adopted a number of management measures, strengthened their own construction and prevented financial risks, and made great progress. However, after China's entry into WTO, foreign-funded financial institutions will enter the China market, and the financial industry in China is still under great pressure, and its development status is not optimistic. Next, we will talk about the development status of banking (mainly commercial banks), insurance and securities industry in China. (1) Banking At present, China's commercial bank market is basically divided by the four major state-owned commercial banks, with a high degree of monopoly. Their business mainly focuses on traditional deposit, loan and remittance banking and foreign exchange business, and they rarely or never engage in all investment banking businesses, such as financial leasing business, insurance business, trust business, property consultancy and consulting business, and tourism advertising business. These business scope restrictions have affected the profitability and innovation ability of financial instruments of China's state-owned commercial banks, and the capital is seriously insufficient, and the loan ability is subject to endogenous constraints. Due to the poor efficiency of state-owned banks and the great pressure to digest their own non-performing assets, they are unable to supplement the fund with operating profits. Therefore, the accumulation of non-performing assets leads to the asset adequacy ratio of some state-owned banks not reaching the requirement of 8% stipulated in the Basel Accord. Due to weak profitability and inefficient use of assets, commercial banks have a large number of bad debts and bad debts. All these will put state-owned commercial banks at a disadvantage in the competition with foreign banks. (II) Insurance Industry In the past 20 years, China's insurance industry has developed rapidly, with an average annual growth rate of 39.6%. It took 15 years to realize the first premium income of 50 billion, and only 3 years to realize the second premium income of 50 billion (see figure 1- 1 and 1-2). By the end of 2000, the premium income reached 654.38+059.59 billion yuan. At the same time, the main body of the insurance market is increasingly diversified. At present, there are 40 insurance companies in China, forming an insurance market structure with state-owned insurance companies and joint-stock insurance companies as the main body, Chinese and foreign insurance companies coexisting and many insurance companies competing. However, there are still a series of problems in China's insurance industry, such as poor strength of insurance companies, few channels for using funds (the income of insurance industry is still mainly premium surplus), low efficiency and management technology, and the service level can not adapt to competition. Therefore, once Chinese insurance companies really compete with foreign insurance institutions, the insurance industry will face a huge impact. Figure 1 1989-2000 China premium income trend Tu Tu 2 1989-2000 China premium income growth trend chart (III) Securities industry China securities industry started in the 1980s, 1990 and199/kloc. The financing amount of China stock market increased from 9.978 billion yuan in 1994 to1922.2 billion yuan in 2006, accounting for 1 1.45% of indirect financing (bank loans). Secondly, with the continuous growth of the size of the securities market, the stock trading volume is also increasing. The stock trading volume of 1993 reached 362.72 billion yuan, and the stock trading volume reached a peak of 6,082.66 billion yuan in 2000, an increase of 16.7 times. In 200 1 year, the number of listed companies in China has reached 1 154, with 66,396,800 investor accounts. The above data show that the China stock market has taken shape after 10 years of rapid development. However, because China's securities industry has developed under certain protection, it has not fully integrated with the international market, and there are still some problems in its further development: First, domestic securities institutions have narrow business scope, single variety and similar structure. The business scope is limited to underwriting, brokerage and self-management of three traditional domestic businesses. Although there are also corporate financial consulting services, most of them are auxiliary means to win underwriting projects. The products and services provided are very similar, and the importance of financial innovation is still not fully understood. Secondly, the financing channels are not smooth, and there are not many listed securities companies. There are three channels: interbank borrowing, treasury bond repurchase and capital increase and share expansion. Short-term financing is the main financing, and there is no long-term financing channel urgently needed for the development of securities firms. Third, the efficiency of capital operation is poor. Fourth, the asset management business of securities firms is chaotic. Fifth, the income of securities brokerage business declined. All these indicate that the new China securities industry, which has only grown for more than 20 years, will face enormous realistic pressure and compete with the powerful foreign securities companies that have been tempered by the capital market for more than 100 years. Two. Comparison of the development of financial services between China and foreign countries 200 1,1year 10. In October, China finally joined the WTO, and it will be an inevitable trend for Chinese and foreign financial institutions to compete on the same stage. If China's financial industry wants to occupy a place in this new competition, it must compare and analyze each other's advantages and disadvantages, judge its own living environment and finally put forward its own strategic plan. (1) Bank 1. The comparison of business scale measures the business scale of comprehensive commercial banks, mainly including total assets, tier 1 capital, number of branches, transnational operations and other sub-indicators. Table 1 Comparison of Operation Scale of Chinese and Foreign Commercial Banks (1999) Unit: Total assets of US$ 100 million, number of tier-one capital branches and transnational operation. China Industrial and Commercial Bank (ICBC) 475438+09. 19 Many transnational operations of domestic branches are in the initial stage. Agricultural Bank of China (ABC) 564361Bank of China 3 1 62.14152.70 Global Organization Layout Global Bank Citibank 31 69.999 Global Organization Layout Global Bank American Bank 468666666 Spherical Organization Layout Global Bank Deutsche Bank 8437.6 1174.18 Global Bank Barclays Bank 3988 As can be seen from the table1,the four major state-owned commercial banks in China are not inferior to international multinational commercial banks in terms of total assets and sources of tier 1 capital. However, judging from the number of branches and transnational operations, except for China Bank, which has many branches at home and abroad and has begun to show some characteristics of global banks, the other three state-owned commercial banks have just started their transnational operations despite the large number of branches. Therefore, from the analysis of business scale indicators, the biggest gap between China's state-owned commercial banks and foreign-funded comprehensive banks lies in the defects of global branch layout and the lag of transnational operation. 2. Comparison of business functions The difference in business functions between state-owned commercial banks and foreign banks in China is mainly manifested in the restrictions imposed by the management authorities on mixed operation and separate operation (see Table 2). Britain, Japan and the United States revised the relevant laws in 1986, 1992 and 1999 respectively, and finally legally abolished the obstacles to mixed operation. China's Commercial Bank Law strictly prohibits commercial banks from engaging in non-banking business such as securities investment. Table 2 Comparison of Chinese and foreign commercial banking business Commercial banking business, investment banking business and insurance business authorities have legislated to restrict the deposit, loan and remittance business of China Industrial and Commercial Bank. Full-featured Industrial and Commercial East Asia did not operate the deposit, loan and remittance business of Agricultural Bank, fully-featured CICC did not operate the deposit and remittance business of China Bank, and fully-featured BOC International did not operate the deposit and remittance business of Citibank. 65. In recent years, China Industrial and Commercial Bank, China Construction Bank and China Bank began to circumvent legal restrictions by acquiring and establishing investment banking institutions at home and abroad, and achieved remarkable results. However, domestic branches cannot engage in securities primary and secondary market business. Therefore, the integration and multi-function of business functions is an important factor to form the strong competitiveness of foreign commercial banks. 3. Financial innovation Comparative financial innovation includes system innovation, mechanism innovation and business innovation. Because large foreign banks are located in market economy countries, there is no problem of system innovation and mechanism innovation, so the comparison of financial innovation is limited to business innovation. As can be seen from Table 3, the business innovation of China's state-owned commercial banks is limited to the traditional deposit and loan and foreign exchange business, and most of the business innovation is based on the products of foreign commercial banks in the 1960s and 1980s. However, varieties with high degree of marketization and high technology content, such as futures, options, interest rate swaps, consumer loan securitization and derivative financial products trading, have not been launched in China. It can be seen that the competitiveness of China's state-owned commercial banks in new products and transnational operations is very weak. Table 3 Comparison of business innovation between Chinese and foreign commercial banks; Business innovation of state-owned commercial banks in China: business innovation of foreign commercial banks; Bank-securities transfer comprehensive account; Floating rate loan bill financing; Electronic bank revolving loan network settlement of consumer credit.