The Impact Of Financial Development On The Optimization Of China's Regional Industrial Structure

China's economy has entered a new normal and the global economy has entered a new mediocrity simultaneously.Quite evidently,it is time for China to comprehensively promote supply-side structural reform and speed up the optimization and adjustment of regional industrial structure.However the role of traditional production factors in promoting economic growth lacks sustainability,there is a weak supply of technological innovation factors in the meantime.Therefore it is difficult for financial resources to flow into the field of technological innovation spontaneously.Originally finance came into being because of the financial needs of the real industry development,but it does not provide continuously financial supply for the real industry development in nature.Thus,it is uncertain for the impact of financial development on the optimization of regional industrial structure.As is well known that in the process of optimizing and adjusting regional industrial structure,more financial support is needed.There is an extremely important role of financial development in promoting the optimization of regional industrial structure accordingly.Thus the flow of financial resources should be able to meet the needs of eliminating backward industries,eliminating excess capacity and fostering structural optimization and adjustment of high-tech industries or emerging industries.Besides financial resources are highly scarce and should be rationally allocated.Firstly,by means of systematic literature review and theoretical analysis,the paper clarifies the connotation of regional industrial structure optimization and financial development.Then,by comparison of the calculation methods of indicators,the indicators and calculation methods most in line with their connotations are choosed.The optimization of regional industrial structure is first measured and compared by three indicators: rationalization,advancement and ecologicalization.After that,the three indicators are coupled with economic growth by grey dynamic correlation analysis method to obtain the comprehensive indicator of regional industrial structure optimization,which facilitate comprehensive comparison and econometric analysis.The paper has creatively drawn a triaxial map of the indexes of rationalization,advancement and ecologicalization in order to compare the long-term and dynamic trends of them.Moreover financial development is described by three sub-indicators: total financial volume,financial structure and financial efficiency.This paper further analyses the impact of financial development on the optimization of regional industrial structure in developed countries or regions such as the United States,Japan,Britain,Israel and the European Union,and then summarizes the experience from it.Considering the big regional gap between China's regional industrial structure optimization and financial development,and the different effects of the latter on the former,it is better to be elaborated separately accordingly.This paper establishes an econometric analysis model in view of regional differences and spatial linkages.Before model testing,systematic data testing and diagnosis are carried out.Variables and models are carefully selected according to the test results.Different models and testing methods are adopted to compare the advantages and disadvantages of them,and the optimal model and the best testing method are selected for the sake of the model's robustness and the test results' reliability.Evidently this paper focuses on the theme of the impact of financial development on the China's regional industrial structure optimization,and tries to build a systematic,orderly and clear research framework.On the basis of theoretical analysis,this paper clarifies the connotation,defines the indicators and the methods of calculating indicators,as well as analyses the impact mechanism.Based on the above,this paper chooses model variables and constructs model for empirical analysis,and then draws lessons from developed countries or regions.Finally,policy recommendations are put forward.The contents of the study correspond to each other.Namely the theoretical analysis provides support for the empirical analysis,which in turn provides evidence for the theoretical analysis.This paper draws the corresponding conclusions: Firstly,there are both financial restraint and financial deepening in the process of the optimization of regional industrial structure in China.Under the new normal,China should further promote financial deepening in the light of the need to optimize regional industrial structure;furthermore financial development should be fully integrated with the optimization of regional industrial structure.Second,there is a “single win” in China at the following aspects,such as financial development,optimization and adjustment of regional industrial structure,as well as the different regions.We should strengthen the protection of private property rights,promote technological innovation,narrow regional disparities,give full play to the supporting role of policy-based finance,and realize the “win-win” of financial development and optimization of regional industrial structure as well as different regions finally.Third,“pollution before prosperity” is a simple replication of the low-quality development path,and it is not the only way for economic growth.For this reason we should abandon the desire for quick success and instant benefit,and concentrate on the high quality of development with pollution-free and prosperity.Fourthly,the empirical analysis shows that the high level of financial development will not necessarily promote the optimization and adjustment of regional industrial structure,moreover excessive financialization will fall into the“financial curse”.Thus we should avoid financial development falling into a self-closed cycle,and realize an open cycle between financial development and the development of real industries taking high-tech industries or emerging industries as the core,in addition,speed up the opening of international markets for financial development including financial supervision.