Research On Financial Efficiency Of Fujian Province And Its Relationship With Economic Development

It is indisputable about the mutual promotion between the development offinancial sector and the economic growth. With the rapid development of China’seconomy, the financial sector has shown its importance. However, it is also due to therapid development of the total amount of the financial sector, the researchers haveignored the study on the financial efficiency; they analyzed it from the perspective ofoperating condition of individual financial institution, lacking of enough thoroughresearch on the relationship between the financial efficiency and the economic growth.China’s overall national conditions and some other reasons have led to the uneveneconomic development among different regions, which each has its own features. Soit is necessary to conduct a research on regional financial conditions. Therefore, thispaper emphasizes on the study of the role of financial efficiency in promotingregional economic development.The paper, takes Fujian Province, with its own distinctive particularity, as anexample to research. The overall economy of this province has maintained rapiddevelopment in recent years, however, in2011the contribution share of the tertiaryindustry has reached the lowest point during the last20years, the growth rate offinancial industry has fall rapidly, and for the first time, the growth rate of financialsector was lower than the national average rate. So it is of great significance to studythe financial efficiency of Fujian Province as well as its relationship with economicgrowth.This paper, adopts the method of progressive analysis. Firstly, it introduces theoverall economic development, uses the method of factor analysis to evaluate thefinancial efficiency of Fujian Province and compares it with that of the Shanghai. Itmakes a conclusion that the conversion rate of savings into investment has a negativeeffect on the overall financial efficiency. Secondly, through the empirical analysis, itshows the significant role of improvement of financial efficiency on economicdevelopment, therefore emphasizes the role of financial efficiency in economicgrowth. Finally, the paper, analyses the causes of the low financial efficiency ofFujian Province, especially the sub-indicators of the conversion rate of savings intoinvestments. The paper puts forward the suggestions that Fujian Province shouldpromote the conversion rate of savings into investments, as well as the overallfinancial efficiency.