China's Financial Development And Economic Growth: Analysis And Perspectives

By retrospection of China's financial development practice since 1949, this paper studies the relationship between economic growth and financial development in China from 1978 to 2001,this reform period. We have used three approaches: The correlation analysis, Grange causality tests and econometrics analysis based on Cobb-Douglas production function including of financial sector. We found that: 1. A positive correlation between growth and financial intermediation exists in China. Financial intermediation plays an important role in China's economic activity. But China's financial development looks like insufficient, which accords with China's economic growth phase. 2. If China's economy achieves sustainable, healthy and rapid growth, the fitful financial system should established to insure the harmony between economic growth and financial development in China. The further researches show that: To improve financial efficiency is the fundamental way to promote financial development. China's financial reform should encircle the core-line of promoting financial system efficiency to implement financial sustainable development finally.Financial Efficiency -Financial Development-Economic Growth, this is the logic venation of this paper.