An Analysis On Anti-administrative Monopoly And Competition Promoting Policies Of Banking Industry In China In The Transition Economy

Finance is the core of modern economy, and the banking industry is the main body of financial industry. Our country's banking industry is presently facing the dual pressure which is its own reform and the international competition. Analysing the question objectively and proposing a correct reform direction and way of banking industry, is both important to the healthy work of the whole financial sector and to the safety of the entire economical system.Looking over the banking industry's development of China, from at first People's Bank's own rule, to state-owned banks' monopoly status, until now all kinds of banking organizations coexisting, the contribution of banking industry to macro-economy is obvious, and the reform and development of the banking industry is also obtained widely approval. At the same time, the argument about banking industry has never stopped. All questions are closely relative to administrative monopoly. This article attempts to use the economic methodology and economic judgment to analyse the administrative monopoly of China's banking industry theoretically and positively, and on the basis of conclusion proposes the policies of anti- administrative monopoly of banking industry in China in the transition economy.To have a clear analysis basis, this article first defines the concept of the banking industry administrative monopoly. The definition includes the following meanings: One, administrative monopoly can be a kind of market structure, and can also be a kind of behavior; Two, the method of administrative monopoly is to exclude competition by using authority, not by using concentration and accumulation of capital based on competition; Three, the goal of administrative monopoly is to achieve government's goal or to realize the bank's internal monopoly benefit.The second step, in the measurement aspect, this article establishes the RSCP index system to assess the degree of administrative monopoly in China's banking industry based on banking industry's general characteristic. Among them, R indicates regulation system and measures that government issues; S indicates matrix of industrial feature; C indicates behavior of the monopoly manufacturer; P indicates target or benefit of administrative monopoly.The index system measures and determines administrative monopoly in the following aspects: How to use and guarantee the administrative authority; What characteristic the market is by excluding competition; What behaviors the administrative bnaks have; Whether does the administrative authority achieve the anticipated goals.Through assessment, this article draws the following conclusions: One is that China's banking industry presents an obvious characteristic of administrative monopoly. Two is that the degree of administrative monopoly in China's banking industry was decreasing continuously in the past several years. Three is that the degree of administrative monopoly in China's banking industry is still high comparing to which of other banks under the mature market condition. The last conclusion is that it is the monopoly behavior but the monopoly market structure that embodies the administrative monopoly.The third step, in theoretical analysis aspect, relying on the microscopic and macroscopic function model of administrative monopoly, this paper analyses the function mechanism and the influence of administrative monopoly in microscopic and macroscopic angle separately. Analysis indicats that, the government interferes with the bank's management by controlling the bank's property rights and using the administrative authority. The administrative monopoly causes the bank to have a series of negative effects. For example, multiple management goals, uneffective corporate governance, weak risk consciousness, unreasonable restraint mechanism, inferior financial innovation ability and so on. The macro-function mechanism is that administrative monopoly strengthens some kinds of functions which have special influence to the macroscopic economy.The conclusion is that the influence and effect of administrative monopoly is ambiguous. It needs to make an empirical analysis further.The fourth step, in positive analysis, this paper modifies the traditional SCP framwork in two ways:one is to substitute single market structure index with some indexs of administrative monopoly; the other is to substitute micro-performance with synthetical performance index. The meaning of Modified SCP framework is that in the Transition Economy of China, the administrative monopoly affects the bank behavior, then determines the synthetical performance which including the micro-performance and macro-performance. Based on the modified traditional SCP analytical framework for the administrative monopoly characteristics of China's banking industry, this paper analyses the relationship between the administrative monopoly and the synthetical performance of China's Banking Industry. The result demonstrates that the banking industry with administrative monopoly plays a positive role in promoting macroeconomic development in the economic transformation, at the same time does harm to its own micro-performance.At last, in the aspect of policy research, the background of anti-administrative monopoly is dissertated. Administrative monopoly does have played a positive role in promoting macroeconomic development, but it is the product under the special historical condition. Moreover, it takes the micro-performance as the price. In the long term, it will do harm to the development of banking industry and the whole economy. As a result, it is necessary to counter the administrative monopoly. There are two ways: One is to limit the government authority reasonably, the other is to reform the commercial banks. Suggestions which are made to reform the banks are separating the policy-type service, Carrying on the stockholder's rights transformation and optimizing Corporate Governance.