| The financial system of China is still dominated by banks and, the development of the banking industry has played a vital role in the process of economic growth. Because of the politic protection, China's banking industry has higher barriers to entry and exit, and the four biggest state-owned banks have got monopoly status. However, with the financial reform and opening policy, more and more joint-stock and regional banks begin to rise and develop. Meanwhile, more foreign banks get involved in China's financial market. As a result, the primary market structure is gradually broken, which is being reshaped by all the banks listed in the paper. With the gradual development of China's capital market, the financing method is changing quietly. Direct financing method has a rapid growth, which is, in a way, making the market share of banks'indirect financing method shrink. People's wealth concept has changed along with the age of universal banking, which asks for commercial banks to provide more financial products and services. All these changes have brought big challenges for China's commercial banks. But, their market conducts have not changed in some way, which fundamentally limits their market performance to improve.In this paper, we combined standardized and empirical analysis, quantitative and qualitative method and comparative analysis method to study on the market structure, conduct and performance of China's banking industry. According to the study, we conclude that the banking market structure is being through with a transition from monopoly competition to moderate competition. But the situation can not be changed in a short time. Because of a serious homogeneous phenomenon, China's banking market conducts have actually constrained the development of business and service innovation. Along with the age of universal banking, China's commercial banks need to get out of the dilemma of homogeneous phenomenon, and seek more financial innovation. The market performance of China's banking industry has been improved over the past time, but there are still great deficiencies which need to be improved, especially compared with some similar banks in developed countries. The market performance is not only related to market structure, but also to the innovations of the market conduct.This paper consists of six parts.Part 1 describes the background and significance of the theme, outlines the framework of the paper, and explains the major research methods.Part 2 reviews the related research literatures that include foreign and domestic studies on the SCP structure of banking industry.Part 3 discusses one key point of the paper, which is the market structure of China's banking industry. After introducing the concept of market structure, we discuss the types and influencing factors of the market structure. Then, we make an empirical analysis towards China's situation with Industrial Economics measuring indexes mainly related to Concentration Ratio and Herfindahl Index. Finally, we make a comparison among the international banking market structure.Part 4 makes a research on the market conduct of China's banking industry. Market conduct plays an important role in the SCP structure. But because of the particularity of banking, there are not more existing literatures. This part focuses on price and non-price conducts. The non-price conduct includes product differentiation, service differentiation, mergers and acquisitions, marketing, and so on. We deeply discuss merger and acquisition activities in China's banking industry in this part.Part 5 studies the market performance of China's banking industry. As the final objective, market performance is of a more important position. On the basis of the last two parts, we describe the general relationship among market performance and market structure and market conduct in this part. After that, we analyze the specific situation towards China's banking industry with some indicators, and make a comparative analysis of international banking.Part 6 is the conclusion. |
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