Finance And Economic Growth Of Chinese Western Region

There are differences in economy development between different regions in China for historical and practical reasons. And the difference is growing, if letting alone, it will hinder our country's economy development and political stability. To solve this problem, we should try our best to bring about the economic development the western region instead of hindering the development of the eastern region. The economists have been realizing the importance of capital, technology, human resource and institutions, they think that it is these factor' function to make the economy grow. This paper has an opinion that the capital has play a basic role, and the financial development will raise and use money effectively. So we can use financial ways to develop the economy of the western region.The paper is divided into four parts. The first one is the summary of the relationship between finance and economic growth. It includes two points, first one is the function of money in economic growth; the second is the theory of financial development. The economists have been realizing that the money plays an important role in economic growth rather than an invalid one. The finance can raise and use it effectively, and it can affect the function of other infectors. Then they draw a conclusion that the finance can develop the economy. But we must see it clearly that their theories are based on a hypothesis that there are no differences in regional economic development. That makes their theories perform less function in our country. The second part is the summary of our domestic economists' exploration about the relationship between the regional finance and regional economicdevelopment. They base their research on the fact that our regional economy exists difference and the theory of the relationship between the finance and economic growth. They explore the relationship between regional economic growth and regional finance, and they think finance can stimulate the growth of regional economy. But their research is paying more intention on the construction of the theory. In the third part, the paper analyzes the economic and financial differences between the western region and the eastern one, and then draw a conclusion that these financial differences affect the difference of the economy. In the last part, the paper gives some measures to solve the problem that is how to develop economy of the western region. The measures include divergent financial policy; the construction of the capital market, the construction of the financial system and some additional policy which includes credit system.