Research On The Entry Barriers In China's Banking Industry

This paper will study China's banking industry entry barrier using institutional method, trying to induce the basic characteristics of China's banking industry barrier through a basic analysis on the present status on Chinese banking industry barriers. After that the main factor influencing China's entry barrier will be studied with the consideration of providing some advice for China's banking industry reform.This paper consists of five parts. In the first chapter, i.e. the introduction, the paper briefly introduces the background and purpose of this research and the relative contents, methods and potential innovation. The second chapter shall be the literature review on banking industry entry barriers, including general theory and literature. Then in the third chapter, the paper studies the present status of China's banking industry entry barrier in the perspective of marketable entry barrier and regulative entry barrier. The fourth chapter focuses on the evolution of China's regulative barriers and its determinants with the help of institutional evolution theory, while this part could be divided into two stages as flow-stock reform of banking industry. The last chapter provides a conclusion and some implications.The main conclusions of this paper are as follows:Firstly, the Chinese banking barriers don't have outstanding market attributes, which are the results of market competition and enforce no positive restriction, but shows more regulative quality. Secondly, the evolution of Chinese banking industry entry barrier is a compulsive process dominated by government, in which state utility and its shifts are determinants. Thirdly, local governments play an important role in this process, which will demand some consideration that on the one hand, local government showed some irreplaceable innovative influence on non-state-owned capital, especially private capital, entering this industry, on the other, local governments often show excessive administrative interference because of their own benefit orientation, which causes the prevalent inferior performances of local banks. At last, the key to Chinese banking industry reform will lie on private capital by giving them fair status in the industry.