Research On The Differential Effect Of Monetary Policy Under China’s Urban-rural Financial Structure

With China’s establishment of the reform direction of establishing a socialist market,reform of the financial system has also been put on the agenda.In 1993,the “ Decision on financial system reform ” issued by the State Council clarified the objectives of the reform of the financial system : to establish a strong macro-control system of the central bank,to establish policy banks,to turn the national specialized banks into real state-owned commercial banks,to establish a unified and open,orderly competition and strict management of the financial market,and to further promote the diversified development of China ’ s financial structure.In the past 30 years,China ’s financial system reform has achieved fruitful results,the level of financial deepening has been significantly improved,the financial function and efficiency have been significantly improved,and the role of rural financial system in supporting agriculture has been continuously improved.However,China ’ s current urban-rural dual financial structure has not fundamentally changed,and has changed from quantity ’ duality ’ to quality ’ duality ’--on the one hand is a multi-level commercial bank system based on modern management level,securities,insurance,investment companies and other non-bank financial institutions coexist in the urban financial system,on the other hand is a single rural financial system composed of rural commercial banks and rural credit cooperatives.Under the urban-rural dual financial structure,the difference between urban and rural financial system resources supply ability,credit transformation ability,in the micro caused the heterogeneity of urban and rural residents ’ consumption and enterprise financing,in the macro caused the transmission channel difference of monetary policy between urban and rural areas,formed the difference between urban and rural effect of monetary policy,reduced the efficiency of monetary policy : expansionary monetary policy can drive the urban economy synchronous,in the same direction change,and the pulling effect on the rural economy generally needs two to three years to show;The tightening monetary policy has a short-term small inhibitory effect on urban economic growth,while it will have a strong negative impact on rural economy.In addition,the urban-rural dual financial structure will also make monetary policy deviate from the expected goal and increase the imbalance of urban and rural economic development.Therefore,exploring the differences in the urban-rural effects of monetary policy and their causes will theoretically help to improve the monetary policy theory and form a monetary policy theoretical support suitable for the coordinated development of urban and rural economy in China in the new era.In practice,it is helpful to understand the differences between urban and rural areas in the implementation of monetary policy in China,and improve the efficiency of monetary policy regulation.Based on the above judgment,on the basis of traditional monetary policy theory,this paper explains the formation process of the difference between urban and rural monetary policy transmission channels,and the causes of the difference between urban and rural effects of monetary policy.First of all,the inductive method and logical deduction method are used to incorporate the micro-subject analysis into the study of the difference between urban and rural effects of monetary policy,and analyze how to form the difference in transmission channels and effects of monetary policy under the urban-rural dual financial structure.Secondly,the historical research method is used to summarize the historical reasons for the formation of urban-rural dual financial structure in China,and the evaluation index system of urban-rural dual financial structure is constructed to depict the current situation of urban-rural dual financial structure.Thirdly,using econometric Panel-Data model,quantile regression and multiple regression methods to test the heterogeneity of household consumption and corporate financing under the urban-rural dual financial structure,and clarify the reasons for the differences of monetary policy transmission channels caused by urban-rural heterogeneous economic entities.Finally,the positive impact sequence(POS)and negative impact sequence(NEG)of monetary policy are calculated.In order to observe the urban-rural differences of monetary policy and its transmission channels under the impact of different directions,this paper constructs the VAR model of the effects of expansionary and tightening monetary policies on urban and rural economic growth,and examines the urban-rural differences of expansionary and tightening monetary policies.The main conclusions of this paper are as follows :(1)Urban-rural dual financial structure is not only the internal product of China ’s dual economic structure,but also the product of the evolution of the financial system.China ’ s urbanrural dual financial structure presents three characteristics : First,the urban-rural financial system differences gradually deepened;Second,rural finance is marginalized;Third,the urbanrural dual financial structure has changed from quantity ’ duality ’ to quality ’ duality ’,showing a ’ scissors difference ’ development trend in the availability of financial resources and the credit transformation ability of financial institutions.(2)There is heterogeneity between residents ’ consumption and corporate financing behavior under urban-rural dual financial structure.Urban residents ’ consumption is related to consumer credit and financial asset prices,while rural residents ’ consumption is related to disposable income and savings interest rate.Under the urban-rural dual financial structure,the monopoly competition between rural commercial banks cannot flexibly adjust the credit supply with the change of market interest rates.Rural enterprises mainly rely on bank credit to obtain financing,while urban enterprises can carry out stock market financing and credit financing portfolio to find the lowest cost financing portfolio.(3)The results of VAR model analysis show that there are urban-rural differences in both channels and effects of monetary policy transmission,and a unified monetary policy will increase the gap between urban and rural economic development.Expansionary monetary policy can stimulate the long-term growth of urban economy,but the pulling effect on rural economic growth is small,and there is a long lag period;The effect cycle of tight monetary policy on urban economy is short,but the inhibitory effect on rural economy is long and the effect is more obvious.The urban modern financial system can stimulate the sustained and rapid economic growth under the impact of expansionary monetary policy,and the negative impact on the economy under the tightening monetary policy;The relatively backward rural financial system has a small stimulating effect on the economy with a long lag period under the impact of expansionary monetary policy,and intensifies its negative impact on the economy under the tightening monetary policy.(4)Suggestions are put forward to improve the efficiency of monetary policy under the urbanrural dual financial structure in China.The first is to speed up the development of agricultural modernization and promote the coordinated development of urban and rural economy and finance;The second is to promote rural financial system reform and improve rural financial efficiency as soon as possible;The third is the implementation of differential monetary policy under the urban-rural dual financial structure;The fourth is to deepen the reform of China ’ s financial system,improve the financial development environment.