Research On The Relations Of Rural Finance In Shandong Province And Rural Economic Development

Since the reform and opening up, China’s economy has been rapid development. However, our over-reliance on "high-consumption, low income," the extensive economic growth mode transformation need a long time, the national economy transformation is imminent. The rural economic development is the key to the realization of economic transformation, to solve the "three rural" issue. Rural economic development is inseparable from the strong support of rural finance. As the core of modern economy, the finance could make the optimal allocation of the social resources to improve the allocative efficiency, thereby promoting rapid economic development. Since the reform and opening up, the various regions of China has been developing rural financial sector, and actively promoting rural financial reform, gained rapid development, China’s rural finance but now there are still many significant issues:the low-scale of rural financial institutions, the single financial services, inefficient, dysfunctional, the weak capacity for sustainable development, the poor transfer and diversification of risk, rural financial wastage and so on. These problems led to the rural finance not only failed to promote rural economic growth, but has become the shackles of economic growth in rural areas. Therefore, at this stage, an important issue in front of the community is how accordance with the basic requirements of the scientific development concept, through rural financial reforms, improve the rural financial system, promote the healthy and sustainable development of rural finance, rural savings mobilization capacity and improve the conversion efficiency of investment, provide adequate funding for the modernization of rural economic development support, while improving the level of rural resource allocation efficiency, and gradually solve the "three rural" issue, achieve rapid development of the national economy.Firstly the paper proposed the research background and significance of rural finance and rural economic relations problems, some related research of domestic and foreign scholars in the field were reviewed; Secondly, the theoretical basis of rural finance and rural economy are introduced, focusing on the analysis of China’s rural the interaction between financial development and rural economic growth; then the paper analyzed the current situation in Shandong Province rural finance and rural economic development, and pointed out the problems; Finally, we selected the 1978-2012 annual datas and used VAR models, cointegration, impulse response, error correction model and Granger causality test and other methods to research the relationship between Shandong Province rural financial development and rural economic growth,and made relevant policy recommendations. The empirical results show that the structure of Shandong Province rural finance development has a certain role in promoting the rural economic growth, the scale and development of rural financial development did not significantly promote rural economic growth; the rural economic growth caused the development of the scale, the efficience and the structure of the rural finance.