Empirical Study On Relationship Between Market Structure And Performance Of China's Banking Industry

China is developing in the new economic norm,with the change of economic growth power and adjustment of economic structure. As the core of the economic system,finance is the support of the economic transformation and upgrading. Commercial bank is not only an important part of modern financial system, but also the means of macro-control, playing an important role as financial supporting in the process of economic development. At the early stage of economy development, the government and central bank have strong control of economy through administrative plan and guide,China's four state-owned commercial banks have large share in the banking market and monopolize the loans deposit. With the deepening of reform, China establishes a new diversified banking market system. Accompanied by financial liberalization trend and financial market reform of the worldwide in recent years, the banking regulation is gradually relaxed, becoming more competitive and opening. Compared with the developed countries,China's banking industry still exists problem in dis-economies of scale, incomplete capital market, imperfect operating efficiency and competitiveness market structure, which must be improved.This article, based on the panel of China's largest 14 commercial Banks through 1999 to 2015, aims at the main research contents of the following aspects: first to analyze the China's banking market structure and its development, the result is that the banking market concentration is lower in recent years but still in a high level, monopoly in the market don't really change. The main reason is the unique administrative monopoly existing. The second to analyze the banking performance. The result is that there is an upward trend in the profitability of commercial banks, and there are obvious differences between state-owned commercial banks and joint-stock commercial banks. Next to analyze the relationship between market structure and performance in banking industry through the regression analysis .The results shows that the market concentration is negatively related to the performance, the lower the market concentration, the more fully the competition and higher the bank's performance will be. Finally, based on the result put, the paper puts forward some policy suggestions for China's banking revolution, that the government should relax the banking regulation, reduce the policy barriers, relax price controls, encourage financial product innovation, improve the governance mechanism of the big four state-owned commercial banks, improve the management of the legal system of rules and regulations,improve the efficiency of the whole industry.Hope this article can help enrich the system of banking theory, and to provide for the establishment of China's banking reform and financial policy.