China's Commercial Banking Market Structure And Performance Study

The protecting period after China entered WTO has already passed away. China will meet unprecedented challenges since foreign banks are ready to enter China's market in an all-round way and will bring fierce competition. Therefore, it is emergent to improve the market structure, increase the performance and strengthen the market competing ability of our country's banking industry. On basis of previous research findings, applying the industry organization theory, the dissertation makes analysis on the market structure, market performance and their relationship of our country's banking industry empirically after which it proposes related policy suggestions.Firstly, this dissertation introduces the theoretic basis of its analysis, that is, the definition, category and historical evolvement of the industry organization theory. It also defines and illustrates the factors related to market structure and market performance.Secondly, this dissertation analyzes the market structure of our country's banking industry in four respects of market concentration, economy of scale, production differentiation and entry barriers. The research finds that the market structure of our country's banking industry is of high monopolization. But this situation is getting better and the market competition is increasing. It also analyzes the market performance of our country's banking industry by using ROA, ROE, rate of non-performing loan and capital adequacy. The research finds that the performance of the banking industry is gradually increasing annually, showing adequate vitality and competition, but there is still a certain gap between our banking industry and the world top-class banks or financial group.Thirdly, on basis of the Collusion Hypothesis and the Efficient Structure Hypothesis, this dissertation analyzes the relationship between the market structure and market performance of our country's banking industry adopting econometrics. The result supports the Efficient Structure Hypothesis, showing that the performance of our country's commercial banks has begin to improve gradually.Finally, this dissertation proposes the policy suggestions for further promoting the market structure and market performance of our country's banking industry. For example, increase the competition of the banking industry, advance effective concentration of the industry, increase the banks' internal efficiency, move forward to mixed operation model and complete our supervision system.