Research Of Financial Support In Chinese Progress Of Urbanization

According to the latest statistics show that China’s per capita GDP exceeded＄5000, China is in the upper-middle-income stage in accordance with international banking standards and faces the risk of middle-income trap. Transformation of economic development mode、bridging the income gap、expanding domestic demand is the main channel to step over the trap combined with the international experience. The Government held the economic work conference on December2012, the Urbanization as China’s historical task to be raised again and became one of the priorities in2013. Urbanization is one of the country’s economic policy to expand domestic demand、narrow urban-rural gap、improve the income level of residents and coincides with the strategy of stepping over the income trap just right. At the same time, urbanization is a long and complex process of structural change and requires a lot of financial support. Financial elements which play important functions in fund raising and resource allocation as the core of modern economy become the indispensable factor in promoting urbanization process, so it has real economic significance about the financial support for the process of urbanization in the perspective of stepping over the middle-income trap.Based on how to build financial support pattern for urbanization made it can speed up the process of urbanization and step over the middle-income trap, the paper is divided into four sections containing relevant theoretical foundation empirical research、issues and policy recommendations. The relevant theoretical foundation summarizes the concept of middle-income trap and urbanization, then draws forth the necessity of implementing urbanization and effectiveness of solving trap, spreads out the mechanism of financial support for the urbanization from three different aspects based on the context of stepping over the trap. It needs to show that the benefit of urbanization focused on industrial restructuring and economic paradigm shift become the main channel of stepping over the trap. Increasing financial support on infrastructure and education will help China step over the middle-income trap successfully in the long road of urbanization, which deepen the deep connection between the middle-income trap、urbanization and financial support. The empirical research is to build the Var model and the gray correlation analysis model to evaluate financial support for the urbanization comprehensively, choosing the indicators which can measure the level of urbanization consider the favorable factors about the trap, the empirical results show financial efficiency is more significant supporting role in urbanization than financial structure and financial deepening, while financial support for infrastructure is less than industry structure and the level of education, which are consistent with the study of situation and predicament. The issues is mainly carried out based on the empirical and get urbanization lack of financial support manifested in four aspects:inadequate infrastructure funding、irrational industrial structure, lack of professional person SME financing and Financial structural imbalance, then giving the suggestions of diversifying infrastructure financing, the financial policy will be responsible for the project which can’t generate cash flow, the financial market will be responsible for the project which can generate cash flow; upgrading the industrial structure, supporting the development of SMEs and cultivating innovative talents will be the main task of upgrading the industrial structure; creating small and medium financial institutions, optimizing the structure of financial markets, the financial market should gradually liberalize interest rates and exchange rate controls and develop the multi-level financing platform, which are to create the most favorable conditions for stepping over the middle-income trap.