Analysis Of Chinese Bankng In Market Structure And Competitiveness Based On The SCP Paradigm

Finance industry is the core of modern economy. And banking is the main body of finance industry. Through more than30years’ hard exploration and reform, a multi-level and diversified banking market system has been established gradually. Obviously, the degree of competition of Chinese banking industry also been improved. Meanwhile, the corporate governance structure, the transformation of the business model and the financial innovation are promoted, as well as, the asset quality and competitiveness is improved. However, the market mechanism and the capital allocation are incomplete, so that our banking industry is facing a great challenge and many potential revealed problems since the global financial crisis in2008. For instance, administrative monopoly leads to low efficiency, the reform of the interest rate marketization needs to be deepened, the asset quality and the differentiation of products and services also needs to be improved. These problems effect the healthy development of our banking industry. Therefore, how to optimize the market structure and enhance competitiveness still is the major issue which our banking industry faces to both currently and in the future.Based on the perspective of industrial organization theory, this paper uses SCP paradigm as the framework to make a comprehensive analysis of the market structure, the market behavior and the market performance of Chinese banking industry, as well as the relationship between the three elements. Then established a suitable analysis framework and proposed policy suggestions to improve the banking market structure. Simultaneously, as a supplement of the SCP frame, the competitiveness theory is integrated into the analysis model, to explore other factors, except Chinese banking industry market structure, which influence the development of banking industry. In order to realize the strategic objectives about the stability and healthy of Chinese financial industry, combined with the industrial organization policy, strategies are proposed to improve the efficiency and competitiveness of our banking industry.