Financial Support In County Economy Growth

County economy is the foundation of national economy, and a perfect system in function with a complete variety of industries, a perfect structure and relatively independent operation and control. Small and middle-scale enterprises in county has developed with industrialization and urbanization, while many large-scale industries transfer towards counties, which has strengthen the role of county economy in national economy. In 2007, the total population in counties was 969 million people, which accounted for 73.3 percent of the total population of China; and GDP in county economy reached 5400 billion yuan in RMB and accounted for 56 percent of the national GDP. That has proved that powerful counties will lead to a powerful country. Nowadays the central government pays great attention to the development of county economy. The Sixteenth National Congress of CPC firstly put forward the concept of“county area”in the formal document of the Party, and called for“developing county economy”. Afterwards the Central Committee of the Party frequently requested“developing county economy”in the important literatures. At the transition of economy and society in China, to build a new socialist countryside and a well-off society in an all-round way, county economy development is taken as a basis for which finance is crucial, which offers opportunities and challenges for finance. Well-handling the relationship between county finance development and county economy growth is crucial for county development. In the previous resarches on the relationship between financial development and economic growth, the researchers usually focus on the macro-aspects. Nevertheless, as for the micro-aspects of county area, whether the results of the relationship between financial development and economic growth are the same as those in macro aspects and how to bring about county economy sustainable development while developing county finance, so as to realize the favorable interaction, all those need to be explored and solved.The results of the analysis according to the financial development theory have showed three cause-effect relations in the relationship between county finance development and county economy growth as follows: dual relation of interaction, single relation of demand following supply, and non-cause-effect relation. Accordingly , based on the current status of county finance development and county economy growth in Fujian, eight counties in Fuzhou are selected as typical cases, and the data about GDP of county economy growth and deposit and loan of county financial institutions from 1978 to 2007 are collected to conduct the integrated test and cause-effect analysis of the relationship between county finance development and county economy growth since reform and opening-up. Meanwhile the relationship between county finance development and county economy growth in eight counties of Fuzhou is classified. The results of empirical research showed that there indeed exist the three cause-effect relations in theoretical analysis between county finance development and county economy growth in eight counties of Fuzhou. (1) There is a dual cause-effect relation between financial development and economic growth in Fuqing and Changle, bringing about interaction. (2) In Minhou, Lianjiang, Minqing and Luoyuan, there is a single supply-leading cause-effect relation between financial development and economic growth, which means financial development promoting economic growth. (3) In Pingtan and Yongtai there is no cause-effect relation between financial developmnt and economic growth. Based on the empirical analysis results, the problems of county finance development in supporting county economy growth in Fujian and their causes are analyzed. Among them, imperfect county financial system leads to the weakening function, county financial institutions demand too strict conditions in lendings, too large proportion of funds are put into deposits, imperfect supervision system for county financial organizations, too weak risk prevention, and so on. Those are major barriers restraining county finance promoting county economy growth in Fujian. Their causes are management strategy adjustment of state-owned commercial bank in reform and transformation, commercialization of rural cooperatives reform, singularity of business in rural development bank, large sums of mail deposits keeping in upper banking, and imperfect social credit environment.To promote county finance better support county economy growth and bring about mutual benefits, building a perfect county finance system by promoting reform is crucial, which includes making clear state-owned commercial banks’market orientation, deepening rural credit cooperatives reform, increasing the policy finance supply to under-developed regions, arranging management system of mail deposit bank, making use of folk capital, encouraging development of local small and middle-scale financial institutions, developing county insurance business, meanwhile reinforcing the support for county finance, enlarging county credit funds source, optimizing county funds investment, increasing aid-farmers credits input, improving banking business service to support farmers, giving full play to the function of credit agency, strengthening supervision and creating favorable environment for county finance development, and preventing and controlling county financial risks.The innovation lies in using the integration theory and the method of cause-effect relation test, taking Fujian as a case, exploring the relationship between financial development and economic growth in the micro aspect of county. How the county finance promotes county economy growth is elaborated in details. This paper takes the counties of Fuzhou as the typical case to conduct empirical analysis and illustrate the relationship between county finance development and county economic growth in Fujian, but there is something for further research.