The Research On Market-stucture And Market-performance Of China’s Commercial Banks

Commercial banking industry is a very special class of enterprises, playing an important role in a nation’s economic and social development. Commercial Banks in China have experienced the reform process with twists and turns which incline to the evolving market structure,and increasing competition, however, the overall competitiveness of the banking business is still relatively low now. In addition, along with the date of full liberalization of Chinese banking industry and the acceleration of the entire national economy of information, many problems, industrial organization aspects in particular,come out increasingly and explicitly. In order to effectively improve the overall competitiveness of banks and resolve the industrial organization issues,making research of the banking market structure and market performance as well as to the relationship between the twoso as to find solution for promoteing China’s financial and economic development is particularly critical.This article firstly through analysing China’s banking market structure and perfor-mance,obtain the current banking market structure and performance condition, and on this basis, the "traditional conspiracy hypothesis" and "efficiency structure hypothesis" are set up in China’s banking sector in order to find the relationship between the Chinese banking market structure and performance,so as for Significance in theory and practice in a certain reference by in-depth revealing.This article take bacground of induastrial organization theory. First, it elaborates the market-structure and market-performance and summarises the research status at home and abroad on the banking market-structure,market-performance and their relationship. On the basis of these, this paper construct the empirical model of China’s banking market-structure and market-performance and their relationship.Taking5large state-owned banks,12joint-stock banks as the basic sample and2003-2011as sample period, then the paper analysis the China’s banking market-structure from market share, market concentration, entry-exit barriers and analysis market-performance from the return on assets, return on capital. In addition, it also take correlation analysis for the relationship between China’s banking market structure and performance. Empirical results show that the market structure of China’s banking industry are oligopolistic, but this oligopoly situation is being gradually broken and the degree of market competition is gradually increasing. But so far, the five state-owned commercial bank monopoly of the banking sector is still high. However, it is not match that the joint-stock commercial banks and city commercial banks did better than state-owned banks. Empirical research on relationship between China’s banking market structure and performance indicate that the "traditional conspiracy hypothesis" and "efficiency structure hypothesis" are not established in the Chinese banking industry. This article analyzes the results and propose it should optimize market structure and improve the performance of the banking sector by improving market barriers, promoting the interest rate market, improving operational efficiency and other aspects.