Study On The Structure, Conduct And Performance Of China's Credit Market

In the modern market economy, money is the first driving force in economic development. For a long time, the financial structure in China has been based on bank agency, thus bank credit has been a main factor that impacts the transformation of savings to investment and supporting our economic growth. Bank credit is the most active part of the market economy, as well as the most sensitive and most vulnerable part in the whole banking link. Since bank credit has strong externalities, once banks' bad loans accumulated too much, it would endanger social stability, even lead to serious financial system risk and perhaps, economic crisis: Data show that the Asian Financial Crisis caused a loss of trillions of US dollars. After the Crisis, the economies of developing countries would usually retrogress to where they were 10 years or even decades ago. In recent years, theorists have had in-depth analysis of the institutional causes of bad loans. Meanwhile, they have triggered discussions about whether current bank credit policies and related regulatory policies suit the economic restructuring. The problems, such as SMEs loaning, the marketization of interest rate and competition, nongovernmental credit development and standardization, have also become the focus of public attention. Clearly, these problems are the challenges facing bank credit market, and also the economic phenomenon that are analyzed and revealed by the theory of modern industrial organization from the perspectives of structure, conduct and performance.This article uses the tool of industrial organization theory to analyze and summarize the structure, conduct and performance of China's credit market, as well as relationships among these three parts. It explores the rule of changes in the structure of China's credit market structure since the beginning of reform and opening up, analyzes the changing forms of competitive conducts in credit market, compares situations of credit market performance among countries in the world, puts forward the status of China's credit market performance after bad loans have been stripped away, thus provides a perspective of industrial organization and some empirical evidence materials for further studies on bank credit market. In the theoretical part, this article attempts to use the classical SCP paradigm and latest achievements in the industrial organization theory research to set up a rigorous logic relationship when analyzing market structure, conduct and performance of bank credit market, and to serve as a basis for detailed discussion of the...