China's Rural Financial Development And Economic Growth In Rural Relations

That the rural population is very large and rural economy accounted for a large proportion of the national economy is our country's basic condition. In view of this, how to effectively use financial development to promote rural economic growth has become an important problem, which has become a key whether the economy in our country can maintain long-term development.Among all the researches on the current rural financial problems, most of them are concerned about the mechanism of the development of rural finance to promote rural economic growth or the statistical description of rural financial development status. This paper, firstly based on previous studies, by using the AHP method, tries to establish a rural financial system from three dimensions of scale, structure and efficiency to measure the development of rural financial development from a new angle. Secondly, by using the Granger Causality Test, we analyze the relationship between economic growth and rural financial development. It is found that rural economic growth has improved rural financial development, while rural financial development has lagged behind rural economy growth. Thirdly, through analyzing the support strength of rural finance scale, structure besides the efficiency level to the rural economy, it is found that the rural finance scale has promoted the rural economy growth obviously while the structure has weaker impact and the influence of efficiency is still weak. This shows that the influence of rural finance to the rural economy is still at the quantity- driven stage instead of being at the quality- driven stage. Finally, it is proposed to take the following measures: Firstly, by deepening rural credit cooperatives reform and guiding commercial banks in rural financial market such as agro-business to enhance the scale of rural finance to strengthen the support to the rural economy. Secondly, open rural financial markets and encourage innovation, increase the type of financial tool which fits the rural financial market and promote the development of rural economy through the optimization of rural finance structure. Thirdly, improve rural financial system. The efficiency of the rural financial system should be enhanced by means of financial innovation so as to improve the rural financial contribution to the rural economy.