| The role that finance plays is getting more and more important during the reform and opening up of economic growth. Development of various countries around the world has shown that the development of financial intermediation correlate with the growth of economy. In China, banking system holds a dominant position in financial industry and it is particularly important for the development of economy. The aim for China's financial reform is to facilitate the banking system giving its full play in promoting the country's economic growth. As far as China is concerned, do these interrelations exit? If they exit, what are these interrelations? In this paper, we will do efforts to research on the relationship separately between the development of financial intermediation and economic growth in the east, central, west and north-eastern region,with a view to make a preliminary answer to the above questions.In this paper, we have modified and supplemented the exited index accoranding to the previous research results and the actual situation of our country. We used annual datas about 30 years since the reform and opening up and setted up VAR models to analysis the relationship between the regional financial intermediation and economic growth, in order to provide theoretical and practical basis for the establishment and improvement of our country's both financial system and the role of financial intermediation paly in the economic growth.The sample datas in this paper included nominal GDP, per capita GDP, GDP index (with base year 1978), deposits, loans and the total investment in fixed assets of the four regions which make up of the China. The variables of selected economic indicators are real per capita GDP, investment, the size of financial intermediaries (loans/nominal GDP) and deposit-to-loan ratio. We used time seried data to build VAR models and then to test them by the way of Johansen Cointegration Test in order to inspect the relationship between the regional financial intermediation and economic growth.The cointegration test allows that variables in the model must be non-stationary and which are stationary when to be done unit root test. After we do thest tests, the results showed that all after taking the logarithm of a number of variables were first-order single whole. Secondly, we have done the cointegration test with the VAR models and the results were as follows: in an over-all run, the economic development accompanied by the continuous improvement of financial system since the reform and opening up in China, there was a long-term relevance between the scale of financial intermediation, the efficiency of financial intermediation and the overall economic growth in every region but western region, and a long-term relevance between the one and fixed asset investment which account for the economic growth in the four regions. Those results showed that there was closely relationship between the financial intermediary development and economic growth in every region of China, and the contact is all-round, including both the expandance of the scales and the improvement of the efficiency. Another, they also showed that since 1978s,the rapid development of banking department in the financial system of China contributed a lot to the steady development of the economic growth. Thirdly, we used VECM to further observation of the changes in the short term side of the other, and the impact of variables in the short term reflects that the scale of financial intermediation had a negative effect on the economic growth and the investment in the eastern and central regions,although the efficiency of financial intermediation had a positive impact on economic growth;the economic growth and the expansion of investment in the eastern part had a significant impact on the efficiency of financial intermediaries, but only investment had in the central region. In the western region, the level of development of financial intermediation had a significant positive impact on the growth of investment in fixed assets investment and of which the scale had also significantly affected the development of financial intermediation. In the northeastern region, the development level of financial intermediation hada significant positive impact on economic growth, and the economic growth also had a significant positive impact on the scale of development of financial intermediation but the efficient of financial intermediation; the level of financial intermediaries did not have significantly impact on investment, but investment in fixed assets could do significantly positive impact on the scale of the development of financial intermediation. Finally, we used Granger causality test to explore the causal relationship between financial intermediation and the economic growth in the long run. Granger causality test results showed that in the eastern part,it is of a "needs to follow" mode which meaned that economic growth led to the improvement of the efficiency of financial intermediation, however, the development of financial intermediation should not become an effective power for economic growth. This because of that this article describes the target selected the eastern part of the region's economic development and enterprise development in the reform and opening up the financing channels for the future as China's financial markets gradually open up more and more diversification and expansion; And In the central region there is a"supply-led" mode, which meant that the level of the development of financial intermediation led to the promote economic growth and rapid expansion of the scale of investment; Besides, In the western region, the causal relationship between the development of financial intermediation and economic growth was not obvious; And In the northeast region, there was a postive interaction between financial intermediary development and investment in fixed assets formation. The central region and the Northeast with the investment and financing system reform and financial system, banks in financial intermediation due to play the role of bank credit among enterprises has become the main channel for investment and financing. Even though our country since the reform and opening up of financial intermediation to the rapid progress has been made, but the inter-regional imbalances in development, the formation of the eastern part of the rapid development and prosperity of the financial market step by step into the orbit, the central and northeast regions are well-developed financial system and policies, the western regional financial intermediary development and economic growth seems to develop slowly, but in the western region with the development of the western region and national guidelines to support policy, investment in infrastructure investment projects have more on investment, economic development is also very rapid.The relationship between financial intermediary development and economic growth puts up regional difference obviously in the eastern, central, western and northeastern region of China. Currently, it will influence the accomplishment of the reformaim, as well as the harmony and persistence of domestic economy, if we ignore this restriction through the reformation of financial and economical system. Aiming at the reformation of financial system, there are some political suggests on the base of this article:Firstly, in the process of economic growth, the government should not simply pursuit of the expansion of scale of financial intermediation, but should pay more attention to operating efficiency and quality issues of financial intermediation. Secondly, we should do much efforts to further strengthen the competion among financial institutions such as state-owned commercial banks, non-state-owned commercial banks, financial trusts, financial companies and so on, in particularly the introduction of foreign-funded financial institutions to take part in the competition campaign and in order to improve the overall operational efficiency of financial intermediation, therefore finally success to break down monopoly role of the state-owned commercial banks in the west and north-eastern region. Thirdly, we should do efforts to promote the transform of the pattern of economic growth.Fourthly, the government should continue to promote the market-oriented reforms of the financial intermediation and improve the openness of the financial intermediary market. Fifthly, we should go into overdrive on China's policy banks to support economically backward regions, not only the input of funds and materials, but also the construction and technology support of the financial system.In this paper, there is a selection of regional innovation on the research of regional, and the economic indicators is also different places with predecessors which is tentative, therefore the conclusions is also much different, which have a few reference significance on China's regional financial and economic development. |
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