The Reasearch On The Impact Of Xin Jiang Inclusive Finance On The Rural-urban Income Gap

Since reform and open up policy,with the rapid growth of economic development and people’s living standard has been greatly improved in Xinjiang.However,the income gap between urban and rural residents and the income gap between different regions have been expanding continuously at the same time.This phenomenon seriously affected the level of economic development and social harmony and stability.Stability and harmony is the basis of all economic activity for Xinjiang in which inhabits many minorities. In this context,the income gap between urban and rural residents in Xinjiang issue has become a hot issue.The development of Inclusive finance plays an important role in economic development,improving urban and farmers’ income and narrowing the income gap between urban and rural residents as well as is an important guarantee for breaking the urban-rural dual economic structure.The United Nations put forward building a inclusive financial system which intends admitting the weak state of rural low-income groups into the rural financial services.So that they can share the welfare of economic improvement.In this context, this paper, has researched the impact of Xinjiang inclusive financial development on the income gap between urban and rural residents and proposed some recommendations to perfect the inclusive financial system and narrow the income gap between urban and rural residents in Xinjiang which has a significant effect to promote the harmony and stability.This paper analyzes the trend of inclusive finance, the income gap between urban and rural residents and the difference of inclusive finance and the income gap between the different regions basing on the theory of the income gap between urban and rural residents as well as the theory of inclusive finance.Examining the inclusive financial threshold effects bases on panel data form 2000 to 2006,2007 to2014 and 2000 to 2014 in Xinjiang;Inspecting the inclusive financial development to reduce effects bases on the data from 1978 to 2014; testing the inclusive financial disequilibrium effect bases on the panel data from 2000 to 2014 of northern and southern regions.It is shown that:(1) the contribution of finance to economic development is increasing following the growing scale of the finance; the level of of inclusive finance increases continuously. While, compared with China, the scale is smaller,the level lower, the system is imperfect; There is a significant interest tendency of capital allocation. Urban residents can get more financial service and rural capital is flowing out. Due to the limited education and the weak financial awareness,the demand of finance mainly reflects in loan demand although there is a hearty demand of inclusive finance; the main supply of financial products lacks diversity, the sustainable development of inclusive finance is impaired due to the shortage of funding micro-financial companies.(2)With the improvement of income,the absolute difference and the relative difference is expanding between the urban and rural residents, the Theil Index is expanding obviously;there is a great income gap between regions,the well developed, the income gap is smaller.(3)Inclusive financial development has enlarged the income gap through threshold effect, narrowed the income gap through poverty reduction effect.There is a different disequilibrium effect in northern and southern regions. Inclusive financial development has narrowed the income gap through ‘Trickle-down effect’ in northern regions while has enlarged theincome gap through ‘Matthew Effect’ in southern regions.It’s concluded because the difference in both economic development and Inclusive financial development between regions,the imperfect financial system,threshold effect and disequilibrium effect can be found.Urbanization can effectively narrow the income gap,the effects of other control variables is various in periods and regions.Regarding the conclusions,it is suggested perfect the inclusive financial system and narrow the income gap from the government,financial institutions and the financial petitioners.