Study On The Market Structure And Performance Of Chinese Banking Industry

The banking industry of China has played an important role in the lifeline of the national economy. Since the Reform and Opining , the structure of Chinese banking industry has developed form"one-bank"market system to a diversified market system , which is composed by the central bank,the political banks,the joint-stock commercial banks and the foreign banks .At the same time , the banking industry of China has made a great performance in managing , it has expanded its proportion a lot . In the beginning , the paper makes a line of banking industry in China ,then based on the Industrial Organization theory , the paper utilize the Panzar-Rosse model to estimate the market structure during 1999-2009 . In this part, the paper choose 14 national banks as the sample. To further study , we divided the whole period into two time periods ,1999-2003and 2004-2009,with the consideration of China's accession into the WTO, and the impact on the opening of Chinese banking industry.Through the empirical analysis, we find that the structure of China's banking industry belong to the monopolistic competition structure, meanwhile the competition degree has strengthened gradually with the accession to the WTO. In the empirical analysis we also could find the performance of China's banks are getting better than before, with the help of Panzar-Rosse model, we find out the causes of the structure and the performance . We take per-capital cost rates,cost rates and capital cost rates into account ,to find a way which could improve the performance of banking industry . Finally, in the view of the current state of the industry, we propose four related solutions: improving the financial markets to enhance the interest rate liberalization, deepening the reform of commercial banks, enhancing the capability of financial innovation, lower the barriers as well as wilder the opening degree of Chinese banking industry .