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WTO entry in 2001 heralded a new stage in the reform of China's banking sector. With the reality that foreign banks would be extended national treatment by the end of 2006, China's banks faced the imperative to reform in earnest. They began reforms from a variety of different starting points and have pursued a variety of different reform approaches. Five years on, this paper assesses efficiency levels in 11 of China's most prominent banks. The results, obtained using Data Envelopment Analysis (DEA), suggest that differences in efficiency levels are actually quite small. On the one hand, this finding is encouraging because it suggests that few of China's major banks lag behind the pack. On the other hand, it also implies that efficiency levels almost certainly do lag in China's less prominent banks, which together still account for more than 40% of total banking system assets. [ABSTRACT FROM AUTHOR]

The current level of economic integration between China and ASEAN will largely determine the scale of the impact of China's WTO entry and the China-ASEAN free trade agreement. This article supplements volume-based measures of real and financial integration between China and the ASEAN-5 with those based on the international parity conditions. The results indicate that China's integration with the ASEAN-5 is already relatively advanced with respect to goods and services markets. Financial market integration however remains significantly incomplete. The main implication of this finding is that the impact of future liberalization will be felt most acutely in financial markets. This makes reforms complimentary to greater levels of external financial liberalization, such as regulatory reforms aimed at improving the risk management practices of financial institutions, matters of urgency for both China and the ASEAN-5. [ABSTRACT FROM AUTHOR]

The much-publicized declining financial performance of China's state-owned enterprises (SOIEs) is generally assumed to be evidence of their worsening economic efficiency. However in this paper we show that during 1980-1996, total factor productivity actually increased at an average annual rate of 1.90% and was responsible for 41% of the rise in SOIE output. The decline in financial performance can be attributed to their terms of trade deteriorating at an average annual rate of 3.19% due to increased competition and price reform. Numerous other factors, apart from economic efficiency, can further explain why the level of SOIE profitability has lagged behind non-state-owned industrial enterprises. While these conclusions do not imply that SOIEs have become efficient by international standards, they do suggest that their economic performance was significantly better than is generally claimed. They also confirm the need to evaluate economic performance directly, using criteria appropriate to the Chinese context. [ABSTRACT FROM AUTHOR]