Financial Support To Revitalize The Old Northeast Industrial Base

It is of great importance to revitalize and reconstruct the old northeast industrial base.On one hand, economic determines finance;on the other hand, finance would promoteeconomic development. Therefore, the revitalization and reconstruction of the oldnortheast industrial base would rely on financial development. It is just from this point ofview that this paper starts the discussion of financial support strategies in the revitalizationand reconstruction of the old northeast industrial base.The first part of this paper makes a theoretical analysis on the relativity of capitalformation and economic growth, as well as the relativity of financial development andeconomic growth. Although the analysis is made on the basis of the whole nation, it suits theregional economic development. In addition, the significance of capital formation in therevitalization of the old northeast industrial base and the function of financial development inthe economic growth of the northeast have also been analyzed.The second part analyses the current situation of financial development in the oldnortheast industrial base, as well as its reasons and restricting factors. Ever since the reformand opening-up, the development of the northeast has been left far behind the eastern coastalareas, and there have been serious lagging problems in the financial development. Among themain problems are: large sum of bad assets of financial institutions;lagging financial grosswith a slow increase;low-speeding development of market resulting in the lack of a completemarket system;dominant simplicity problem of financial institutions and insufficientpluralism of financial instruments;low financial efficiency and lack of operating order;faintcredit concept and bad credit environment;and lagging problem in bank reform and creativity.Various reasons contribute to the slowness of financial development and the two main reasonsare: first, the old northeast old industrial base has a high dependence on the planned allocationof financial resources;second, the economic relations of the old northeast industrial base havea low degree of marketability. At present, the serious lagging problems in financialdevelopment have already greatly hindered the revitalization and reconstruction of the oldnortheast industrial base.The third part discusses the financial support strategies for revitalizing the old northeastindustrial base from three aspects. The first strategy is on development and creativity ofnortheastern banks, including strategies of perfecting and creating state-owned commercialbanks, developing regional commercial banks in the northeast;perfecting policy financialsupport system;establishing financial institutions in foreign lands reasonably;and usingfinancing lease and trust to provide supports for enterprises. The second strategy is concernedwith direct financing in the development and creativity of the northeast, which includesstudying the policies on supporting direct financing in the revitalization of the northeasternenterprises;perfecting and developing stock market in the northeastern region;perfecting anddeveloping bond market in the region;constructing and perfecting northeastern propertyexchange center;and actively supporting and developing Dalian commodity futures market.The last strategy is on the regional differences in currency and financial policies, includingimplementing slanting reserve rate of deposits system, slanting interest rate system, andslanting credit system;empowering the region more local financing power.The fourth part of this paper makes a discussion on the auxiliary measures in revitalizingthe old northeast industrial base from three aspects. The efficiency of financial supportdepends on good auxiliary measures, which includes: first, adopting multiple ways to dissolvebad assets;second, implement a series of financial and revenue support;and last, furtherperfect the northeastern credit system.