Analysis On The Relationhip Between Financial Development And Economic Growth Based On Economic Regions In China

Recently China has made a series of economic region development planning. Against this background, for the first time we put forward a new method to analyze the relationship between financial development and economic growth in the perspective of planning economic regions, based on the data of Yangtze River Delta economic region, Pearl River Delta Economic region and Bohai Rim Economic region. We collect relevant data, use both descriptive analysis and empirical analysis methods, finally we come up with some meaningful conclusions and policy recommendations:firstly, there is a long-term and stable relation between financial development and economic growth in anyone of the three economic regions, but the influences of financial development on economic growth are different. Among the three economic regions, the influence of financial development is maximal in Pearl River Delta Economic region and minimal in Bohai Rim Economic region; secondly, the data of three economic regions can pass the KMO and Bartlett tests and a factor can be extracted. The results of factor analysis shows that economic growth is a driving factor of financial development, too. At the same time, the six indices we choose make different contributions to financial development in different economic regions, we can see it from the factor loading table. In Yangtze River Delta Economic region, total deposits and loans of financial institutions make the largest contribution to financial development and the utilization of foreign capital makes the smallest; in Pearl River Delta Economic region, per capita annual disposable income of urban households make the largest contribution to financial development and similarly the utilization of foreign capital makes the smallest contribution; in Bohai Rim Economic region, per capita annual net income of rural households make the largest contribution to financial development and total loans of financial institutions make the smallest contribution.