Study On The Regional Difference In Relation Of Financial Development With Economic Growth In China

Regional development as a means of improving the socialist market economic system was carried out at the stage of the growing disparities of regional economic problems .To narrow the differences between regions, we should vigorously promote the relatively backward economic growth. In modern economic growth, financial development has played a central role in the allocation of financial resources, risk management, information supply. Deepen the reform of China's financial system, so that the financial development will promote economic growth in a larger extent, is an urgent issue for china to resolve. Deepen the reform of China's financial system; China must sort out the financial and economic development of relations between regional differences.This article taken the finance development theory as the instruction, utilized modern statistical theory and method and profited from the domestic and foreign related research results, making system analysis on the regional difference in relation of financial development with economic growth in coastal economy quite developed area and the west economy owed developed area.First, in foundation of comprehensive elaboration finance development theory , we used the coefficient of variation, Theil indicators to make descriptive analysis, then, using the panel data unit root test, co integration test and error corrected model, we conducted the comparison research on the long term and short term relations between the financial development and economic growth in eastern and western region of China, observing the different mutual function relations in the stratification plane. In the end of this paper, based on the research, our country monetary system reform policy are proposed.The research indicated, in China, we confirmed the regional differences do exist. As the core of the modern economy, financial industry's status had improved. The financial industry output contributed to economic growth had a significant gap between the regions. Economically developed southeastern coastal areas, the output value of the finance and insurance industry contributions to economic growth was relatively large, and the western areas, it is the opposite. We can conclude that there is closely linked between the regional economic development and the financial sector .The empirical results show the obvious difference in eastern and western region of China: a bi - directional long - term relation and a bi- directional short - term causality are founded in eastern region. However, there is a unidirectional long - term causality from financial development to growth and no short -term causality in western region. Finally, on this basis, some policies are put forward to promote the coordination development of economy and finance in eastern and western region of China: First, Promoting China's regional financial development strategy and implementation of differentiated financial measures. Second , deepening reform the financial system, promoting the coordination of economic and financial development.