The Study Of Non-equilibrium Chinese Foreign Exchange Market Based On SCP Paradigm

This article adopts quantitative and qualitative analysis to analyze Chinese foreign exchange market non-equilibrium conditions. Then on the basis of using industry economics SCP paradigm analysis, combine with the successful experience of the international foreign exchange market and Chinese national conditions, this article explores the basic ideas to improve Chinese foreign exchange market.The government has always been inclined to use price and volume control to interfere the Chinese foreign exchange market. These methods have increased employment, improved the economy, raised the level of foreign exchange reserve growth, the government greatly increased the accumulation of wealth and external purchasing power. But in recent years, the non-equilibrium phenomena of Chinese foreign exchange market become worse: foreign exchange supply continues to outweigh the demand, foreign exchange reserves grow lager, People's Bank of China intervenes the market passively, increasing pressure on the rise in the RMB, and so on. In this article, this article uses general equilibrium theory, through the market supply and demand situation, the foreign exchange market price - the exchange rate, and utility of Chinese foreign exchange market, to obtain Chinese foreign exchange market is in a state of non-equilibrium.Under this premise, considering the great success of application of SCP paradigm created by Harvard school in analyzing industry organization issues, this article tries to apply it to Chinese foreign exchange market, and analyzes the state of non-equilibrium. This article analyzes the Chinese foreign exchange market non-equilibrium with the Structure-Conduct-Performance Paradigm. This article resolves SCP into several indexes and tries to analyze the change relation among every index. Then this article synthesizes it to receive a holistic understanding. The structure indexes include market concentration degree, market barrier, products difference, and market scale. The conduct indexes include price behavior, the central bank intervention in the foreign exchange market, behaviors of the market maker. The performance indexes include efficiency of resource allocation and innovation activities. The normative method combines with the positive one, the static analysis combines with dynamic one, and the quantitative analysis combines with qualitative analysis are adopted in this article. Trough using the dates in the year 1994-2007, this article pays much attention on the foreign exchange market after the new reform. Based on the analysis of various indexes, the conclusions are as followed: the deficiencies of the Chinese foreign exchange market structure is the fundamental reason for the non-equilibrium; Chinese foreign exchange market is lack of performance; Chinese foreign exchange market reform and improve the structure are urgent matters.In response to these findings, this article analyzes different countries (mainly include: major international currency markets of developed countries and newly industrialized countries (regions) foreign exchange market), thereby this article gets inspiration of easing access to the Chinese foreign exchange market non-equilibrium. Finally, combine with the practical situation of China, this article puts forward the policy recommendations for Chinese foreign exchange market.