On The Structural Evolution Of China's Commercial Banking Market

This thesis analyses the market structure of China?s commercial banking system which is composed of four big state-owned commercial banks and some small commercial banks.In the first part of this thesis, the author analyses such features of the commercial banking market as the market concentration and the market performance, on the basis of a case study in China?s banking market, we can draw a conclusion that this market is such a one that has a highly concentrated market structure and the state-owned commercial banks play a monopolistic role in the market.In the second part of the thesis, the author analyses the institutional factors that causes the monopolistic banking market. These factors include China?s gradual economic reforming method, and the government s preferences for the economic stability and indirect financing, the state-owned banks?preference for the economies of scale is also an important factor.Some dilemma and problems resulted from the highly concentrated banking market are also analyzed These problems include the unequilibrium between the finance system and the macro-economic system, the inefficiency and the stability of banking system, the diseconomies of scale , the risk and cost which have been born by the state-owned commercial banks.In the fourth part, the author analyses the institutional change of China?s commercial banking market with a case study.According to the above, in order to change the situation, the financial reform which has been directed by the central government should be changed and the excessive scale of the state-owned commercial banks should shrink by dividing them to several new medium-sized commercial banks. The degree of concentration in banking market could not be Iowed unless some active policy is taken measured.The target of the banking system reform is to structure a multi-gradation and market-oriented plural-ownership commercial banking system. And the market should be composed of moderate scale banks while the target market should be an efficient banking market characterized by intensifying competition.