The Research Of Financial Deepening And Financial Repression In The Rural China

Since the reform and opening, our national economy has taken great development. But the contribution ratio of the agriculture and the proportion of the rural economy in the national economy have been declining. The residents'income gap between urban and rural has been continuously increased. The issues of"Agriculture, Rural, and farmer"become important problems puzzling the China economy. Indeed, there are a lot of factors to slow down the rural economy. People always try to find ways in system reform, market and industry structure change, and technology improvement to improve the rural economy. However from the finance repression and finance deepening point of view, few researches cover the effect of finance on rural economy growth. Finance is the core of modern economy. Economy development level determines the finance development level, while finance development reacts on economy growth. It has the theory and operation significance to refer the rural finance theories, to analyze our country's rural finance repression and finance deepening issues, and to provide the related policy recommendations.First of all, this article reviewed and summarized the rural finance theories. Exercising the finance repression and finance deepening knowledge, using theoretical and practical analysis, qualitative and quantitative analysis, it determined the level of our country's rural finance deepening. The author found that the progress of our country's finance deepening was around 3 years behind the country average, more than 18 years behind developed countries, and that the extend of rural finance deepening was far from enough. Then it analyzed the relationship of rural economy and rural finance deepening. Establishing the rural economy growth model, using regression analysis, it pointed out that the rural finance deepening index was important to rural finance growth, and that the poor rural finance restricted the rural economy growth. After that, it discovered the root causes of poor rural finance deepening, from both supply and demand angles. At last, it suggested the counter measures that we should establish a rural finance system with sufficient investing and loaning tools and numerous institutions, and accelerate the progress of interest rate liberalization, in order to deepening the finance and improve the rural economy development.