Capital Markets To Promote Economic Growth In The Western Region

Regional economic growth imbalance is a universal phenomenon. However, when it advances to a certain stage, regional economic coordination and integration becomes the prerequisite of the sustainable development of national economy. Since its reform and opening to the outside world, the rapid economic growth of eastern China and facilitated the development of the whole nation's economy. Meanwhile, it has also expanded regional disparities to a large extent, which has exerted great impact on sustainable development of Chinese economy, national unity and social stability.In view of the large gap between the economic development in east and west parts of China, Chinese government has implemented the great strategy of Opening the West in accordance with Comrade Deng Xiaoping's Thoughts on "Two Overall Situations". The strategy of Opening the West is put forward in the context of socialist market economy. It is Chinese government who proposed the proposal and the government is duty-bound to invest large amount of precursory capital. However, government is incapable of providing most of capital needed. Economic Growth in west region is after all a market practice. As the leading mechanism that directs the allocation of resources under the circumstances of market economy, capital market will play the leading role in raising the fund needed and allocating the fund.This paper, titled Study on Capital Market promoting Economic Growth in West China, is in an attempt to figure out through theoretical analysis and case study the mechanism that capital market promotes the economic growth in China's west so as to provide theoretical basis for the formulation of relative policies. Capital market in the paper refers to acollection of capital flowing and financing activities that last longer than one year inclusive of the stock market and banker credit market that last longer than one year. The West refers to the 12 provinces (municipality /regions) including Guangxi, Inner Mongolia, Chongqing, Sichuan, Guizhou, Yunnan, Tibet, Shanxi, Gansu, Qinghai, Ningxia and Xinjiang.The train of thought and the main content of the paper are as followings:At first, this paper describes the present situation of the capital marked in west region, reviews 3 classical model of economic growth as well as 3 sources of economic growth, then points out the capital market promotes the economic growth through promoting the sources of economic growth. When the importance of the 3 economic growth's sources of economic growth. When the importance of the 3 economic growth's sources changed, the emphasis of capital market should be changed . The 2nd chapter analyze the reason of capital market falling behind in west region, then comes up with the improving policy suggestions.Based on a large amount of the government's fund , the west region keep a quick development. The key element of this economic growth model is accumulating capital. However , government is incapable of providing most of capital needed as well as west region has no enough fund for its financing restrain. So the model whose key element is accumulating capital must be changed, becauseit is not sustainable.As a whole, west region is in early industrial stage, but the west region is a non-balanced situation for its wide area. The cities in west region are not so poor, but most of countries are very poor. The two-paradox system between the city and country is so severe. The gap between east and west most be showed in the development of the country. The gap will be narrowed as if the west countries make a fast progress.So , after accumulating capital , the transform to the two-paradox system between the city and country led by technological innovation may be the most important source of economic growth in west region ..In the 3rd chapter, the path of the capital marked promotes, the economic growth in west region is explained from the perspectives of country area's economic growth and city area's economic growth. The path is that capital market promotes technological innovation and economic struc...