China's Financial Development And Urban-rural Income Gap,

This dissertation, firstly, gives a simple description of the relationship between financial development and income inequality between rural and urban residents in China.Then we seek to understand the evolution of financial system in the course of China's economic transition and try to theorize the affecting pattern based on Chinese rural society from different perspectives. The initial gap results from the talents of rural and urban areas. And the development strategy gives the characters in favor of urban residents. Financial arrangements, as a functional mechanism of development strategy, strengthen the disparity tendency.To confirm the conclusion, the dissertation empirically analyzes the relationship during the period of 1985-2004, with regression analysis and Granger Test. It is verified that financial development widens the income inequality gap partly. So the increase of rural residents'income is the key issue, and income comes from economic development. So we should consider how to stimulate rural economic development via financial system. Primarily, we can't go against the economic law and should mobilize resources from agriculture to more efficient industries. Rural residents get income from non-agriculture industries. Financial intermediaries can help rural residents cross over all kinds of thresholds during the mobilizing course. Commercial banks are profit-motivated entities, which rationalize the government's involvement by other financial arrangements.