China's Rural Financial Development And Rural Economic And Social Development Relationship Of Empirical Research

As a large agricultural country, the "three rural" issue, which remains a major problem to be solved of the present and the future for a long period of time, related to global well-off society construction and new rural construction. The rural economy and social undertaking can’t be separated from the service of rural finance. How to enhance the level of financial development and develop social undertakings for promote the rural economy, has become an important research topic. Started the mechanism of action among rural finance, social undertakings and rural economy, and based on the analysis on the current conditions of rural finance, social undertakings and rural economy, this article built VAR models to study the relationship among rural finance, social undertakings and rural economy thoroughly. Ultimately, this paper proposed improvement measures, to promote rural economy.Firstly, this article utilized the financial development theory and the finance and economic growth theory, and unified the facts of our country, to analyze the mechanism of action among rural finance, social undertakings and rural economy; the conclusion is that the rural finance can obviously promote the development of the economy and social undertakings. Secondly, collect relevant data to the descriptive analysis of the current conditions of rural finance, social undertakings and rural economy. From the tables and graphs, slow development of rural finance, inadequate development of social undertakings and the rapid growth of rural economy due to the implement of reform and opening up, are easy to observe. Then based on the mechanism of action among rural finance, social undertakings and rural economy, this paper built three variable VAR models, conclusions are that rural finance has a Granger Causality relationship with rural economy,but has no Granger Causality with rural undertakings. At the same time, conclusions from Variance Decomposition are that, rural finance can obviously promote the development of rural economy in the short term and the contribution rate is25%, and in the long term the effect of promoting is descreasing, which tends to zero gradually. Finally, according to the empirical results, this article put forward the following five policy proposals to promote the growth of rural economy:1, Diversify the rural finance;2, Encourage innovation in rural financial products;3, Consummate the financial legal system;4, Deepen the service of rural finance on economic growth;5, Strengthen the promotion of rural finance in the development of social undertakings.