Analysis on efficiency of Chinese commercial banks Research Proposal

Analysis on efficiency of Chinese commercial banks - Research Proposal Example A series of banking reforms have been implemented in China since 1979. These reforms aim to create a safe and sound system of banking within the country (Dong, 2009). The structural and institutional arrangements characterizing the banking sector in China as well as the banking reforms implemented in China in the past 20 years will provide the background and foundation of the study(Dong, 2009). The researcher felt that for efficiency to be discussed in-depth, it may be necessary for historical antecedents and facilitators of the same to be analyzed in order to provide the reader with a wealth of information. In the last 40 years, financial sectors across the globe have witnessed substantial developments(Dong, 2009). The change in the operating environment of banks has had significant implications for the business activities of banks as well as their economic role. Globalization, deregulation, technological progress and financial innovation to mention but a few have all gradually reduced the cost of processing and transmitting information which have been major forces impacting the performance of the international banking sector. Since the embarking of the open door policy in 1979, the Chinese banking sector has witnessed gradual yet notable reforms(Dong, 2009). A key objective of the said reforms implemented by the government was to build a competitive, effective and stable banking system to improve reliability and efficiency. The reforms aimed at moving the country from a planned economy supplemented with market elements to a socialist market economy. The Chinese government deregulated and liberalized operations in the Chinese banking sector as part of national reforms in the economy. The program applied includes among others the establishment of a double-tier system, separation of the lending policy form commercial