The Effect Of Welfare From Chinese Banking Industry

This paper studies the impact of China’s banking sector of the three mainparticipants of individuals, businesses, and government welfare.The Chinese banking sector to the welfare of the individual analysis, we firstexplained theoretically intertemporal consumption theory, to draw consumersmaximize the effect of an intertemporal consumption behavior, consumers throughsavings income to the next of consumption or loans ahead of the consumer to achieveintertemporal consumption. Consumer income in the period compared with theconsumer, the utility of intertemporal consumption is better. Consumers throughintertemporal consumption compared with current consumption obtaining additionalutility, can be said to obtain additional benefits. This additional benefits to consumersthrough to achieve the savings and loan in the bank, so that banks’ savings and loanbusiness brought additional benefits to consumers. Empirical analysis of consumerbehavior in China through China30years of data proves the existence ofintertemporal consumption behavior. Empirical qualitative analysis of the effect of theChina Banking personal welfare. Finally, taking into account the relationship betweenthe individual and the bank mainly for deposits and borrowings, and these twobehaviors are closely linked with interest rates. The individual effect functionreference Zou (1991,1994,1998) G.corneo and O.Jeanne (2001) using utility form ofseparability, utility functions, including the consumption and assets, through empiricalanalysis of the gross domestic product (GDP), the consumer price index, the depositrate analyses individual utility, the empirical results show that the overall trend of thebank deposit interest rates is smaller, individual utility is negative.China Banking welfare analysis from the point of view of financial leverage andtax shield effect. The angle of the tax shield effect from the empirical analysis of thecorporate balance sheet, found that businesses can use the tax shield effect fromtax-free interest on bank loans to reasonable tax avoidance, and found more the taxshield effec being used the more corporations develop. Reasonable tax avoidance taxshield effect can be said that an additional benefit of the bank to the enterprise. Theempirical analysis of financial leverage angle123Housing prices listed real estatecapital requirements, found in the range of reasonable gearing ratio proportional to theratio of enterprise value and financial leverage, the larger the enterprise value is oftenhigher financial leverage. Positive financial leverage of enterprises can be seen as akind of welfare. China Banking on government welfare effect analysis mainly from bank loans,bank lending rates and the economic development of the relationship between twoangles to analyze. Sound and rapid economic development, can be said in terms of thegovernment is a welfare and economic development is good, reduce unemploymentand social stability, favorable to the government position. First, by constructing asocial welfare function, the empirical analysis of bank loans for social welfare. Theempirical results indicate that the loans of China’s banking sector has a significantpositive impact on social welfare, generate significant indirect benefits of thegovernment. Then draw, through the establishment of the regression analysis, therelationship among interest rates on bank loans, the investment in fixed assets and thegross domestic product (GDP), to come to the bank a reasonable lending ratesconducive to the enthusiasm of banks to lend, is conducive to the efficient use offunds, in favor of economic development.