Understanding of the gap between city commercial banks and stated-owned banks in China------Examples for Shanghai and Guiyang

Abstract: This paper is for understanding the gap between city commercial banks and state-owned banks. In our image, the gap is exsiting for a long time, but how large is large, could it be changed. Through the quantitative analysis using CAMEL rating system, the conclusion is the performance of city commercial banks is wearker than state-owned banks from capital adequacy, assets quality, management, earnings and liquidity. However, the gap is narrowing, the city commercial banks are expected to be stronger to compete with the state-owned banks. In that case, the whole banking sector of China would be improved by competition, the financial market is not only the games of four financial magnates. At last, the paper pointed out the development of city commercial banks need apprapriate strategies which are coordinated with its own local economic growth. It provides four strategies based on case study in order to narrowing the gap with state-owned banks.