The Industrial Structure And Efficiency Of China's Banking System

For a long time, the typical industrial structures of commercial banking systems around the world fall into two categories, one is represented by the USA's commercial banking system, which has been highly dispersive; the other is represented by that of German, which is highly concentrative. Countries whose structures of commercial banking system are similar to that of German are French, Japan and Britain, while the USA's case is rare. In China, since the foundation of the RPC, the big four state-owned commercial banks had monopolized the industry for decades, only since Reform and Opening, the condition has changed to some extent.As the department of allocating resources, the commercial banking systems have been and are still playing important role in the macroeconomy in many countries, their efficiencies affects the total growth and efficiencies of the entire economy; on another hand, the industrial structure of commercial banking systems is a significant factor affecting the industrial efficiency. As a result, it becomes a remarkable matter.However, because there were quite different industrial structures of commercial banking systems around the world, and people held different opinions on the desirable structures, it becomes a difficult problem for developing countries to establish efficient banking systems and for countries with inefficient banking systems to make improvement. If they want to follow the lead of some countries, it will be necessary to contrast their own concrete situations with that of other countries to find out the most similar ones, whose commercial banking systems perform efficiently. But which aspects affect the performances of banking systems is still a problem. Without considering which factors are significant, mistakes may also be made, it means the wrong objects are followed. Meanwhile, some people think that since the USA is the most developed country, and its dispersive banking system have existed for more than a century, this structure must be desirable. So they support the opinion and policies of establishing a dispersive commercial banking system.There are many research materials about the industrial structure and efficiency of commercial banking systems, and quite many of them ignored its particularity and dealt with it as an ordinary one. They used Harvardian school's "Structure-Behavior-Performance" paradigm of industrial organizations as their theoretical basis and concluded that the relative concentration of commercial banking systems' assets would bestow market power to the bigger ones, who then would control their service prices to make monopolistic profit, therefore the industrial efficiency would get down, and which was more serious, the allocation of resources would be distorted. As a result, this kind of industrial structure was undesirable. In addition, in different periods, scholars of many countries have made positive investigations and got quite different and even opposite conclusions.In this thesis, the author hopes to find out the desirable structure of commercial banking system. The author believes that, on one hand, the SCP paradigm is imperfect, and it has become less and less able to explain the reality with times goes. Of course, the present situation of our country is different from that of those western developed ones, and to some extent, we are backward. But we are different from their past, too. Because then they did not face the environment we confound with now. We can not use the SCP paradigm as the basis of analyzing the present condition of our commercial banking system, either; on another hand, now concentration is prevalent in many industries, in order to explain the fresh situations, new theories of industrial organizations have been established, among them the "Contestability Theory" put forward by Baumol and some other scholars performed well, economic policies based on it have given good results. According to this theory, so long as there are no industrial barriers at all or they are quite low, the threat from potential comp...