The Influence Of Banking FDI On The Chinese Banking Market Structure

On the one hand, the openness of China's banking can help to break the monopoly, to introduce competition mechanism, to strengthen the competitive pressure, and promote the pace of technological progress and innovation of China's banking. On the other hand, foreign banks are inevitable to seize resources for domestic customers, share the profitability of Chinese banks. According to industrial organization theory, FDI will obviously affect the market structure of the host country as multinational companies to enter the host country market, but it also affected by the existing market structure of the host country. Thus, as China's banking opening up and entering of foreign banks, the banking market structure is undergoing significant change.Combined with the development of China's banking industry and banking FDI inflow, this paper described the effect of the entry of FDI on China's banking market structure of banking . This effect included barriers to entry to the banking, banking product differentiation, the impact of banking market concentration. The continuous inflow of FDI into banking, China's banking market structure changed from the highly oligopolistic market to the structure with lower degree of oligopoly. The continued expansion of FDI into the banking, promoted China's banking industry concentration, lower entry barriers, improved the degree of product differentiation of China's banking, promoted market competition .The market structure is conducive to speed up the adjustment to the equilibrium level.Combined with the experience of developed financial markets and the special situation of China's financial markets, within a period of time in the future, China's banking market concentration will be reduced to a low, and as time goes by, the market will return to the upward trend in concentration. In this process, the banking FDI is bound to be an important variable.In the long period optimization of the banking market structure adjustment process in the future, should make foreign banks play an active role in promoting, foreign banks can not take the initiative hopes to promote the development of China's banking market structure optimization, to do instead of relying on foreign capital foreign investment. Government departments or regulatory agencies should be gradually reduced through policy barriers to entry, the progressive realization of the banking industry and encouraging small and medium mixed mergers and acquisitions among banks. And domestic commercial banking should take the initiative to change, through the business innovative, active cooperation with foreign banks, take "investment" and "talent recruitment" simultaneously and other measures to improve their own competitiveness.