For a long time, the Chinese financial sector is under the control and monitoring of Chinese central government, especially is the banking sector. The foreign banks face heavy restrictions and challenges while entering the Chinese market. The Chinese financial market structure seems to be inadequate for the foreign countries as it is imperfect and monopolized by the government.
There are basically two types of market structure, which include the perfect and imperfect competition.
The perfect competition is a market structure among the individual firms.
The characteristics of the perfect competition market structure are:
(1) Pricing: the sellers do not have the ability to control the price of the products in the concerned market. They usually adopt the prices determined by the market. Moreover, within perfect competition market structure, no industry is large in context of the total sales or purchases.
(2) Homogeneous product: Each seller produces the identical or almost similar products. This means the products are homogeneous.
(3) Market: buyers and sellers have all relevant information about prices, product qualities, supply sources, and other key aspects. And the companies within perfect competition market structure do no face any kind of barriers while entering or exiting the concerned market place.
The imperfect competition demonstrates an industry or market in which only one or a few sellers can influence the prices, while others have to face some kind of barriers or difficulties to enter the concerned market place. The different forms or types of imperfect competition include monopoly, oligopoly, monopolistic competition, monopsony and oligopsony.
A monopoly is the market structure which exists, when a specific firm, person or enterprise is the only seller in a market place to purchase a good or service. Monopolies are thus characterized by a lack of economic competition to produce the goods or services and a lack of viable substitute goods.