Research On The Boundary Of Government And Market In China’s Inclusive Financial Development

Inclusive finance is presented for the first time in the "Microcredit" campaign in 2005 by the United Nations. Its basic meaning is that groups of all ranks and classes all can enjoy financial services. The economic development of “three agriculture” and small enterprise is an important core of the economic development of our country. The prevalence of financing difficulties and insufficient financial supply have seriously affected the sustainable development of Chinese economy. But the development of inclusive finance can meet the demand of the low-income people for funds.The inclusive finance of our country has a late start and develops relatively slowly. But with the development of economy and the progress of society concept, more and more attention has been paid to the development of inclusive finance in our country. In November 2013, the central committee of the communist party of China clearly put forward “developing inclusive finance” in the third plenary session of the eighteenth. In march of 2014, the Primer Li in his report on government work put forward “Let finance becomes a living water pool and irrigates the real economy, such as small enterprises and “three agriculture” economy. So developing inclusive finance is the demand of economic development and the trend of the time. Although inclusive finance has certain development in our country, the problems of low coverage of financial infrastructures and insufficient financial supply still exist in the vast rural areas in China. Though several causations may cause the insufficient development of inclusive finance of our country, blurred boundaries between the government and market is the key causation. Unsound market mechanism, imperfect laws and regulations can lead to market failures in the process of the disposition for resources. In order to realize more effective and more reasonable resource allocation, the government needs to step in and play the role of “visible hand”. So in the process of development of inclusive finance, how to learn from the experience of the international successful cases and how to define the boundary of the government and the market are issues that can not be ignored.In reviewing the relevant research literature at home and abroad, the thesis firstly expounds the relevant theories about financial development, efficiency and equity and the relation of government and market from three aspects. In order to research the reasons why Chinese inclusive finance has less developed, the article not only analyzes the effect of government in the development of inclusive finance in our country, but also makes the relative policies and the development of inclusive finance of Shandong province as specific example. In elaborating and analyzing the boundaries between government and markets of the foreign cases, we can learn much successful experiences. Finally some policies and suggestions from two levels of government and financial institutions are proposed to perfect the development of inclusive finance in our country on the basis of analyzing the inadequate development of inclusive finance in our country and the successful experiences of foreign inclusive finance cases.