Abstract:The commercial banks of China have some characteristics on both administrative monopoly and market monopoly. The monopoly in commercial bank industry is the most important reason why the firms finance becomes so difficult and expensive, and the reason why the manufacturing enterprises is lack of the profitability. To build a socialist market economy system with Chinese characteristics, the domination of competition policy in the competition of commercial banks must be established. Furthermore, while strengthening the supervision over the banking industry, the openness of commercial banks and the speed of other capital entry will be improved. The central bank should gradually establish a market based benchmark interest rate and the regulatory mechanism so as to get out of the dilemma of regulating and controlling that is suspected of being illegal through a self discipline mechanism.