On The Interrelations Between Financial Development And Economic Growth In China

Since Ronald I. Mckinnon and Edward S. Shaw putting forward the poIicy of financialliberalization to give impetus to the economy of undeveloPed countries in 60-70's tWenty centUry, theinterrelations betWeen financial development and economic growth attr8ct ext6nsive int6restS and leadthorough researching of many expertS in finance. economy and govemment policy makers. Theexperiences of intemational debt crisis. relahve domestic economic stagnahon of many undeveloPedcountries and increasing economic growth of many developing countries (For example China) highIightthe importance of mobilizing domestic financiaI resources and setting up a financial operahng systemwith high efficiency during the period of economic growth of those undeveloped and deveIopingcountries. In the point of Iong time distances, the reaI financial development of a country means itSinner financial structure evoIving from simple to complex. its the financiaI function starting frominefficiency tO perfect and high efficiency.The experiences of economic growth of many countries around the world show the interreIationsbetween financial developnlent and econoll1ic growth. The main indicatOrs measuring financialdevelopment are the issuing scaIe and inner value structure of financiaI instrUmentS relating to the scaIeof a country's virtUal economy. The interrelations between financial development and economic growthcan be peeped and grasped from those indicators' n1oving patterns. As far as financial development isconcerned, what is the macro and micro prerequisite for financial development? How to design andorganize financial institutions. financiaI marketS and financiaI instrumentS? How to set forth the Iinesand steps of financial reforms? How to maintain the development of financial system? ln differenteconomic growing phases, where are the upper and Iow lines of issuing scale of alI financial instruments?Where are the intrinsic value boundaries of financial instruments when issuing of those financiaIinsmimentS? What are the determining factors and micro-economic foundahons of upper and Iow lines?As far as economic growth is concerned, how financial system improves economic growth? And whatare the channeIs and mechanisms? How virt'Ual economy maintains and pushes the operahons offictitious economy? What are the dimensions of macro-economic and financial policies to be adoptedand implement6d to maintain the mutUal stabilization and deveIopment of virtual and fichtiouseconomy? What are the det6rmining factors? The questions mentioned above are the issues that theacademic and polihcal circles fOcus on. Because clearly identified interreIations are beneficial to financialadjushoentS of the relahve structure and posihon of financiaI instrumentS and markets enforced byfinancial administrative sectors according to some virtUal economic indicators, are contribute to themanagement and controlling of the whoIe scale of credit and the issuing scale of financial instruments,are conduce to maintaining the mutUaI stabilization and harmonious development of financial andeconomic system.Standing on the current understanding of interrelations betWeen financial development andeconomic growth revealed by predecessors, this dissertation makes deep researches on the penetrahng.expanding and cochning mechanisms of financial instrumentS circulahng in virtUal economy under thecondihon of basic principIes of mutUal stabilization of financial and economic syst6m. Also, in theorythis dissertation makes deep researches on the determining factors of the upper and low lines of issuingscale of financial instrumentS, on the micro economic basis of issuing scaIe and intTinsic vaIue structureof financiaI instrUmentS and the inner connections among them. on the maintaining channe1s andmechanisms of virtUaI economy to fictitious economy. Then, through coIIecting China's actuaI economicdata of financial deveIopment and economic growth, this dissertation focuses on the ma...