The Research On Chinese Banking Industry Market Structure

The financial industry will face more drastic competition after it opens to the outside all around. The finance is the centre link of economic activity, as such important industrial sector, the stability and prosperity of banking industry has a direct impact on the development of the whole national economy. Due to the particularity on the process of form and development of China's banking industry, there are still has the problem of higher concentration and lower efficiency which has weaken the bank competition tremendously, so it is very necessary to reform.The thesis begins with the current research of market structure of China's banking industry. First of all, through the empirical analysis of market structure from the perspective of market share, ration of market concentration, barriers to entry and barriers to exit. and then make an important conclusion that Chinese banking sectors'market structure has been changing from oligopoly to monopolistic competition, but currently the state-owned banks still have strong market power, the financial market have high concentration.Then we use SFA method to measure the profit efficiency, point put that the performance of state-owned banks are obviously behind joint-stock banks. So we judge the market structure is not the result of industry's efficiency, the parallel cause of the Phenomenon of higher monopoly and lower efficiency are administrational monopoly, complicated framework of organization, quality life, very high market barriers and strict scope of business. Aiming at the weakness of the financial market, we suggest that the destination of reform is to transform administrational monopoly to economic concentration. We emphasize on establishing the efficient market structure by introducing the competitive mechanism. At last, we put forward some proposals including deepening the reform of property right system and organization structure of state-owned commercial banks, developing the small banks, driving the innovation of financial products and loosening strict controls and so on.