Interactive Role of Gats Commitment and Dynamics of Chinese Economic Reform in the Context of Banking Liberalization

China's GATS commitments represent the most radical services liberalization in the WTO negotiation history. The pervasive view, both domestic and international, is that China was obliged to commit itself in financial service liberalization in exchange of WTO admission ticket. The central question is: Are the Chinese WTO commitments an act of imprudence, that may be perceived as a dramatic loss of discretion in policy-making and a move leading to economic instability, or, on the contrary, are those commitments economically, legally and politically desirable? If this is desirable, what are the underlying driving economic motives which had not been revealed officially or examined academically before? In addition, what are the necessary supporting and accompanying domestic reforms in order to maximize the benefits from the envisaged liberalization?By applying both economic and legal analysis, this study attempts to identify the bottlenecks of domestic reform at the time China took the commitment shortly after the Asian financial crisis. Market failure, monopoly, inequality treatment, are three major barriers to further economic development. Essentially, there were compelling needs to create an enabling legal framework and a competitive environment for the emerging private sector. It is crucial to facilitate the transformation of the State-owned-enterprises and State-owned-banks and enable the reforms to be sustainable. In this context, the study will highlight what obligation GATS meant and how Chinese legislation responded. It further examines the interactive role of WTO commitment with Chinese domestic economic environment and development after China's WTO accession