Research On The Disequilibrium Of Financial Development In Western China

As a vast developing country, Disequilibrium of regional development in China is a basic character and objective existence. Based on the national economy in 1998, Deng Xiaoping clearly prosed the “two general situation” strategy thought. It means that the eastern costal areas take the lead in development and strengthen the opening to the outside world, therefore the mainland in China should support this strategy. The eastern area must support the mainland in China when developing to a certain stage which should be subject to the general situation. The regional developing strategy of “two general situation” is a kind of unbalanced regional pattern of development. There is no doubt that the rapid increase of our national economy and economic growth is largely due to the unbalanced regional strategy of development since the reform and opening in China. Based on the strategy, the country has achieved great development. Our country also established a overall strategy of four regional economic development, including the eastern area taking the lead in development, the rise of central China, the development of the western region and the revitalization of the northeast in China. Our country has formed the developing pattern of four regional space.However, the contradiction of regional development which exposed many deep problems in China is increasingly significant. The most prominent problem is the disparity of regional development. Although the country has prosed to achieve coordinated regional development and formulated the overall strategy of promoting the coordinated development of regional economy, and the program during the twelfth-five period also emphasized the importance and urgency of promoting coordinated regional development in China, yet the gap among regions is still widening. The regional growth pattern has not fundamentally changed the trend of the enlarging regional gap. In fact, the regional development in China is still extremely disequilibrium. The western region in China is the most typical unbalanced area. As the biggest economic area covering 686.7 square kilometers and accounting for 71.5% land area of China, there is a huge contrast between the poverty of western inland and the rich of eastern coastal area. Also there is a huge contrast between the poverty of the western inland today and the center of the world in the history of western China. The eastern region has become the engine of economic growth in China, but the vast underdeveloped western region has already become a restriction of the leap of economy and society in China. The vast economic region is still underdeveloped area and there are regional disparities in the broad region itself. The gap between rich and poor, the polarization of income gap is increasingly significant with the expansion of regional disparity, which is obviously contrary to the essence of socialism. Only to realize the objective of post-transendence, promote coordinated development of western region, solve the prominent contradictions and problems in the process of regional imbalance development in western region which has the character of most provinces, largest and poorest area, it can lay a solid foundation of the overall coordinated and sustainable development of the national economy.As the core of modern economy and the main driving force of modern market economy, there is a detailed theoretical support of finance in the factor of modern economic growth. It was also validated by the practice in the economic development of countries all over the world. As the spatial level of financial development, regional finance focuses on the discussion of the distribution and interactive relationship of financial structure in the medium level of region. Economic development decides the financial development, therefore regional financial development in China is significantly unbalanced. The level and speed of regional financial development in western area obviously lag behind the eastern region which show a widening trend. After entering the second decade of development of the western region during the twelfth-five period, especially the implementation of strategy of “the Silk road Economic Belt” in the “One Belt and One Road” project, the opening-up pattern in China is changing, the opening degree of financial industry will be enhanced. The western region is facing a rare historical opportunity of development. However, if the phenomenon and situation of excessive unbalanced development of regions has not changed, and the coordinated mechanism has not been top designed and systematically perfected, the competitiveness of financial industry in China is difficult to achieve a qualitative improvement under the background of financial globalization. Meanwhile, it is difficult to achieve a harmonious and efficient development of finance, and therefore it is hard to promote the coordinative and sustainable development of economy, society and culture.In this paper, the research is based on the philosophical view of the universal relation of materialist dialectics, the dialectical relationship between universality and particularity of contradiction, the thought of dialectical unity of equilibrium and disequilibrium. In the methodology this paper insists on the method of contradiction analysis and system analysis, using the development and connection mode of thinking to analyze problems, setting up the combined idea of global and local investigation, whole and part analysis. From the perspective of two spatial levels, based on the main contradiction—the unbalanced problems between western and eastern development of regional finance and the main aspect of contradiction—the unbalanced problems among western provinces of regional financial development, this paper reviews, summarizes, analyzes the regional economic theory and the theory of financial development, systematically sorting out the context and frontier of theories. Meanwhile, this paper creatively uses four research views of disequilibrium of financial development as the breakthrough point. Firstly, it is the quantitative perspective of disequilibrium of financial development which uses indicators to measure the performance and situation of unbalanced problems of financial quantity in the western region. Secondly, it is the structural perspective of disequilibrium of financial development which uses indicators to measure the performance and situation of unbalanced problems of financial structure in the western region. Thirdly, it is the functional perspective of disequilibrium of financial development which uses indicators to measure the performance and situation of unbalanced problems of financial function in the western region. Fourthly, it is the systematical perspective of disequilibrium of financial development which places the financial system to the overall environment of system. It uses many methods of analysis such as logical reasoning, statistical description and econometric analysis, exploring the factors which lead to the unbalanced financial development in western region. It also analyzes the comprehensive effect of unbalanced financial development on economy, society and culture from the qualitative perspective, constructing a dynamic mathematical model to measure the influence of the unbalanced financial development on regional economic growth from the quantitative perspective. The perspective of systematic analysis includes economic and non-economic factors which reflects the interdisciplinary. It also includes theory and knowledge of non-economic departments, such as sociology, anthropology(Cultural anthropology), religion, ethnology, history, geography, law. The research of this paper makes every effort to reach a thickness of history, height of thought, depth of profession and breadth of disciplines.This paper puts forward a comprehensive and systematic conception and suggestion, which is based on the views and conclusions of logical discourse system, multi-dimensional perspectives, diverse analysis methods. Firstly, it takes full account of the objective fact and the current situation of unbalanced financial development of western region, narrowing the gap in regional development, and the realization of transformation form disequilibrium to coordinated development. Secondly, it takes full account of the realization of combination of harmony and efficiency of financial system and the coordinated relationship between financial system and external system, such as economic transition, social transformation and cultural renaissance.Based on the logical system in this paper, the core content includes the following several aspects:The first part is introduction. This part describes the background purpose, proposing questions of research, discussing the significance, defining concepts and elaborating the category of research. It also elaborates the ideas and methods of research, techinal route, logical framework, the main contents of innovation, deficiency and the direction of further research.The second part is the review and analysis of theory of literature. This part summarizes the development of regional economic theory and present situation of situation at home and broad, elaborating the germination of the theory of financial development--the formation of the theory of financial development--the new progress of the theory of financial development--the expansion of theoretical perspective of financial development according to the order of development, reviewing the theory of financial development from the dimension of space. Based on the combination of two geospatial levels and four dimensions, this part reviews the literature, expounding the relationship of the theory and this article.The third part is to explain the historical evolution and study the problems. From a historical perspective this part describes the balanced phase of development of regional economy and regional finance from 1949 to 1978. Based on two levels of space, perspectives of financial quantity, financial structure, financial function, this part describes situation of development of unbalanced regional economy after 1978 and illustraues the spatial and temporal characteristics and the trend of disequilibrium with the methods of empirical statistical analysis, chart analysis and normative analysis.The fourth part is to analyze the unbalanced reasons of financial development in the western area, which is based on the basic philosophical views of the universal relation of materialist dialectics and the systematical perspective of financial system. It also explores the formation mechanism and analyzes the trend of influential factors with the methods of qualitative analysis, descriptive statistics, comparative analysis and empirical test from the factors of institution, economic conditions, objective environment, informal institution and the impacts of uncertainty.The fifth part is the analysis of the negative influence of disequilibrium of financial development in western China. It carefully analyzes the negative effects which are caused by the excessively unbalanced development of regional finance to economy, society and culture from the qualitative perspective.The sixth part is the empirical analysis of influence of disequilibrium of financial development in western China on regional economic growth. This part briefly reviews the inner mechanism of impact of regional financial development on regional economic growth, measuring the efficient difference of contribution of regional financial development on regional economic growth with the variable coefficient model of panel-data. At the same time, it quantitatively measures the long-term and short-term dynamic effect of regional financial development on economic growth with the methods of unit root test, cointegration test and error correction model of panel-data. This part also analyzes the theoretical frontier of financial development, investigating the empirical relationship among the legal system, the rule of law, financial development and economic growth, partly explaining the the proposition of “Chinese puzzle”—the low level of law and economic growth of high speed. It also empirically analyzes the relationship among social capital, financial development and economic growth, illustrating the substitutional mechanism and coupling relationship between the rule of law(formal institution) and social capital(informal institution) at the regional level. Finally this part points out the importance of the construction of institutional environment including perfecting the environment of legal system, improvement the rule of law(formal institution) and the renaissance of the excellent culture(informal institution) in western China.The seventh part is the conclusion and political suggestions. According to the logical system of this article and the main points of research, this part summarizes research conclusion of each chapter, pointing out that we should pay more attention to the top mechanism design of the transition from unbalanced development of regional finance into coordinated development. On this basis, we put forward two levels of corresponding recommendations with the thought of systematic view. One is the political choices of the coordinated development of the regional finance in western China such as building a diversified system of financial institution and optimizing the banking structure, building the capital market of western China and optimizing the structure of financial market, cultivating the regional financial center in the west and exerting the influence of financial agglomeration and diffusion, promoting multi-level cooperation of regional finance, developing the mobile finance to lead financial innovation and improving the financial efficiency, implementing the regional financial policies of differentiation in harmony with the unity. The second aspect is the political choices of the regional financial system in western China in coordination with the external systems such as perfecting the law system and improving the efficiency of the rule of law, spreading the excellent social capital and promoting the renaissance of the excellent traditional culture in western China, reshaping the ethical system of modern financial development in the socialist market economy.