After China entry into WTO,efficien cy competition will be the centraliz ed reflection of competition be-tween Chinese banks and foreign banks.The author uses factor analysis to make a quantity research on the effi-ciency status of ten Chinese banks an d two foreign banks.Based on the rese arch the author probes into the cause of low efficiency in the state -opera ted commercial banks.Ways on how to i mprove the efficiency of Chinese commercial banks are suggested.