Research On The Financial Factor In The Evolution Of China’s Income Distribution

The phenomenon of economic growth and unbalanced distribution has emerged since China’s reform and opening-up. The paper argues that the distribution pattern is an economic result, of which the decision mechanism is a dynamic process of benefits sharing. Benefit-sharing process is performed as right formation, value realization, property division, exchange and structure of combinations, based on a variety of economic resources by economic entity. These sharing activities need support of liquidity provider, portfolio investment, fair pricing, contract management and other financial functions. An important part of economic transition is reflected in the perfection of property right system and the increase of supply of financial functions. China’s reform and opening up, at the same time, is a process of economy accelerating monetization and securitization:by the end of 2013, the M2/GDP is close to twice and the economic financialization ratio reach 2.85. In the background of economic financialization and property right system transition, the financial sector and financial function play a more and more important role in the process of benefit-sharing. China’s financial sector itself is also in the process of multiple transition. Lack of financial functions, variation or differences in treatment will occur sharing mechanism variability inherent, which finally magnifies the distribution gap in the market economy and cause intergenerational transfer. Compiled on the basis of the typical facts of Chinese distribution and related literature review, the third chapter of the paper constructs theoretical framework containing benefits sharing of financial functions and interprets the allocation primarily. This framework includes three parts of production sharing, consumption sharing and public sharing. The fourth chapter mainly discusses the share of household income in the macroscopic distribution pattern in the view of the breadth of benefits sharing, especially the comparative connections between household sector and government in the benefit sharing. The fifth chapter mainly discusses the factor income distribution in the view of the depth of benefits sharing, that is, the relative proportion of labor remuneration and capital income. In the state of financial control, this proportion relationship actually reflects the key point of sharing relationship between the household sector and the corporate sector. The sixth chapter focuses on the main reason of the household sector’s internal income disparities extension. In the theoretical framework of benefits sharing, we integrate two relationships between residents and the government, residents and enterprises, and use various indicators such as Gini coefficient, urban-rural income ratio, consumption ratio, Theil indexes to measure the income gap in empirical analysis, verify the point that to magnify financial scale and improve financial efficiency is not conducive to the distribution of income. Summarize in Chapter 7 of the full text, and try to explain the US subprime crisis from the perspective of benefit-sharing and human capital, as well as attempts to answer the question what is "good" finance.