Study On Evolution Relationship Between Financial Repression And Industrial Structure

After a rapid development over a longer period of time, China has entered a phase of significant economic adjustment. The economic adjustment is intended to achieve a higher level of health and more sustainable development of the national economy. For a long time, China has adopted investment and export-led economic growth model,and had a dependence extensive mode of economic development. Corresponding to the extensive mode of economic development is the low level of industrial structure. This not only caused the destruction of the environment and resources,but also severely restricted the improvement of economic efficiency and industrial added value. The upgrading of the industrial structure has become the main task of the next stage of our economic development.The upgrading of the industrial structure needs a lot of funds. And more important is a efficient capital allocation system,which could distribute the capital to the most in need and efficient industries or enterprises. That cannot do without a sound financial system. China’s financial sector has long been under the strict control of government. We have financial repression problem such as the control of rate and credit rationing.This leads to distortion in resource allocation and inefficiency of capital utilization.The mechanism of funds allocation depends on the efficiency has been seriously limited. To solve this problem is particularly important in the context of our industrial structure adjustment.This paper analyzes the influence mechanism of financial repression policy on the evolution of industrial structure. In the different stages of economic development and based on different economic system and economic background.The policy of financial repression will have different effects on the evolution of the industrial structure. After analyzing the effect of financial repression policy under different stages of economic development,we found the financial repression policy have a positive effect on industrial structure upgrade. However, with the gradual development of the industrial sector and the socialist market economy, financial repression has hindered the promotion of the industry structure. Through the empirical analysis of the data for the last twenty years, we have proofed the financial repression has made a significant blocking effect to the promotion of industrial structure. The empirical results also show that financial development has contribute to industrial structure upgrade.But the economic growth has failed to bring the corresponding industrial structure promotion effect. Finally,we put forward the corresponding policy recommendations.