Is There Any Problem Of Excessive Development In China's Financial Industry?

In fact,China's financial development has both insufficient and excessive problems.The lack of development is mainly due to the underdevelopment of inclusive finance;over-development is the excessive development of the financial industry relative to the real economy.At present,there are many studies on the problem of insufficient financial development(inclusive finance)in China,but there are few studies on the excessive development of China's financial industry.Now,the negative impact of this excessive problem on economic development has become increasingly prominent.And the hollowing out of the real economy has become more and more serious.In the long run,the cornerstone role of the real economy in economic development will be unsustainable.Based on this,this paper will focus on the excessive development problems in China's financial development process,mainly answer the following questions: Since the 21 st century,how has China's financial industry development affected economic growth? Does China's financial industry have an over-development problem relative to the real economy? Does the issue change over time? How to position the relationship between the financial sector and the physical sector?The main contents of this paper are as follows:Based on the over-development of the financial industry,this paper summarizes the relevant researches at home and abroad,discusses the connotation and mechanism of the excessive development of China's financial industry,summarizes the negative effects brought about by the excessive development of the financial industry,and classify the scholars' measurement methods for the excessive development of the financial industry,providing ideas and methods for empirical analysis belowUsing the Pagano(1993)AK model,this paper theoretically expounds the impact of financial development level on economic growth under different conditions from two aspects: insufficient financial development and excessive financial development.There are two states of insufficient financial development: one is that the financial sector is in an initial extensive state,the financial sector cannot meet the shortfall of the most basic financial needs of the whole society;the other is that when the financial sector has gone out of its initial state,its resource allocation capacity and investment efficiency insufficient.When the financial sector enters the stage of excessive development,the marginal impact of the financial sector on economicgrowth is actually negative.At the same time,this paper is based on the theory to map the relationship between financial development and economic growth,and to interpret the impact of financial development on economic growth at different stages of the chart.The empirical part is based on the relevant economic and financial data of each province and city as the main sample data.The sample period is from 2000 to 2016,with financial development indicators(FIN,total RMB loans by provinces and cities/GDP of each province),and separation indicators between financial departments and entities(DIS,the growth rate of the added value of the financial industry minus the growth rate of industrial added value,measuring the excessive development of the financial industry relative to the real economy)as two main explanatory variables to research several issues mentioned in the previous section.Considering that there are certain differences in the economic development of various regions.Considering that there are certain differences in the economic development of various regions,this paper conducts an empirical analysis from the national and regional(east,central,and western)levels,and conducts a segmental study of the sample period in the analysis process.Through literature combing,theoretical analysis and empirical research,this paper mainly draws the following conclusions:First,financial development indicators(FIN)measured by credit have a negative impact on economic growth.At the national level,this indicator has had a significant negative impact on economic growth since 2009.At the regional level: in the eastern region,the impact of FIN indicators on economic growth was significantly positive before 2009,but significantly negative after 2009;in the central region,the impact of FIN indicators on economic growth has undergone two changes – by From the2000-2004 sample period to the 2005-2009 sample period,the impact of FIN indicators on economic growth has changed from insignificant to significant,while after 2009,this positive impact has declined significantly;in the western region,The indicator was not significant before 2009,but it was significantly negative after 2009.Second,China has a problem of excessive development of the financial industry relative to the real economy,and the problem has increased over time.The problem is similar at the national and regional levels: the negative impact of the DIS indicator on economic growth before 2009 is not serious,but after 2009,the negative impact of the DIS indicator on economic growth has begun to increase.The DIS indicator isexpressed by the difference between the growth rate of the financial industry and the growth rate of the industrial sector's value added,which means that after 2009,the negative impact of the difference on economic growth has increased significantly.Third,developing the real economy can alleviate the above negative effects.From the empirical results when considering both FIN and DIS indicators,it can be seen that both the national and regional levels,the negative impacts of FIN and DIS indicators on economic growth exist simultaneously,and their negative impact on economic growth is consistent during the sample period.Therefore,developing the real economy,Promoting the financial sector to support the real sector,on the one hand,can solve the negative impact of inefficient credit on economic growth,on the other hand,can reduce the separation between the financial sector and the real sector.