| During the 20 years of reform and opening up, China has made remarkable economic progress and development. Both economy and people's living standard have reached an unprecedented level. However, behind the great achievement, regionalized imbalance appeared in overall economy in China. Regional differences, especially those in the eastern, central and western areas, have been growing bigger and bigger. This gap appeared in the total economy, people's living standard and economic vitality. On one hand, this imbalance was due to regional difference in history of precipitation, and the favor of country's macroeconomic policy on the other. In the early stage of economic development, the limited resources are unlikely to achieve a comprehensive development, which caused to a certain extent that the level of economic development of china's eastern part is far from over central and western areas. With the promotion of the progress of economic development, this gap is growing. To achieve the sustained and healthy development of national economy, it is unrealistic to rely solely on the eastern coastal areas. Therefore, given the current economic conditions permit, the government should focus on the balance between economic growth to realize regional economic prosperity and the healthy operation of the economy as a whole. The development of regional finance is an essential part to achieve regional economic growth and development. Many historical facts and theoretical studies indicate that financial development promotes economic growth. Therefore, this paper is based on regional financial development, hoping to achieve regional economic growth and realization of the overall coordination economic, healthy and sustainable development.This paper mainly consists six parts:The first part A general overview of the theory of financial developmentSince the 1990s, the introduction of financial economics endogenous growth theory thoroughly elaborated the coexistence of financial development and economic growth. The relationship between regional financial development and economic growth is the concretion of the relationship between financial development and economic growth in space. The second part Regional theory and financial developmentThere are notable differences in regional economy, and interlinks as well. Regional finance has its own characteristics, such as regional financial time and space, levels, attraction and radiation, and environmental differences. The environmental factors of financial growth explain he background and root of the differences in regional financial development. Regional financial development and regional economic development are roughly paralleled and closely connected. Regional financial development will accelerate regional economic development; financial depressions hinder the development of regional economy. Regional financial growth study and discuss the laws of special differences and concrete distributions. Regional financial development is contained in the process of economy's formation and changes, different regions provide diversified conditions and room for growths; In the meanwhile, regional financial growths of different degrees and levels provide inner power. Regional financial growth reflects as the increase of regional capital input in quantities, and the higher efficiency of regional resources in qualities.The third part The analysis of current situations in regional economy and regional finance.The differences of regional economy in our country are significant, mainly in GDP that regions account for, per capita GDP or per capita income, fix investment differences and industrial structure differences, etc. As for the financial development, the indicators as financial interrelation ratio, bank assets structure and its proportion, the added value of insurance industry and its proportion are quite different. Direct financing capacity (stock market and bond market), efficiency of financial institutions and financial competitive differences make the problem of shortage of funds more serious in central and western regions. The conflicts between unified monetary policy and regional economic differences mainly consist of conflicts of unified money supply in practice, regional differences of monetary policy's macro-control effect, and regional differences in monetary systems all further increase the imbalance of regional economy. After inspecting the differences in eastern, central and western areas in the levels of development of economy and finance, the analysis of causes that led to the uneven distribution of funds is that of regional economic differences.The forth part The empirical study of regional financial development and regional economic growth, this part is the mainly body of the theory. Empirical analysis is necessary to understand the quantitative relationship between regional finance and regional economic growth when we finish theoretical analysis. First, using time-series data on the relationship between the regional economic growth and financial development in the Granger causality test, the reality corresponds with theory. In our country, financial development promotes economic growth. Based on inspecting all the relationship between the amount of economy and finance, we have an empirical study in view of regional financial development and regional economic growth, In order to analyze the affection of regional financial development to regional economic growth, we make use of the panel data of regional economic indicators from 1980 to 2005 and fixed assets model in which per capita GDP growth rate is dependent variable, and financial interrelation ratio, import and export, fixed assets inputs are explanatory variables. The result shows that financial development is the biggest role in promoting the economic development in the central, medium in the west, and minimum in the east. In each of the various regions in the stock market as the total share listed on the control variables. We find stock market contributes most to the economy in eastern regions, but not significant in the central and western areas. All the empirical results have confirmed that regional financial difference is one of the most important one in the regional economic disparities.The fifth part The policy proposals to promote regional financial development with a view to achieving regional economic growth and balanced regional economic growth as a whole. The first step is the financial organizations recycling systems and the construction of diversified financial structures, and the second is to establish pilot area of financial reform and foster innovatory financial institutions in central and western part of china, then carry out regional differences in the monetary policy and establish regional capital market. Finally, prevent regional financial risk actively and improve financial supervisory system. Maintaining the financial health of eastern regions while promoting financial development in the central and western areas to realize the coordinated development of regional finance and proceed to achieve a balanced development of economy in our country. |
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