Research On The Influence Of Different Flows Of Bank Credit In China On Economic Growth

Nowadays,China's financial system is dominated by banks,forming a financing system dominated by indirect bank financing.Reasonable allocation of bank credit resources is very important to China's economic growth.After the outbreak of the global financial crisis in 2008,in order to achieve China's economic recovery and stimulate economic growth,the central bank invested a large amount of money and implemented a robust and loose monetary policy.Although China's GDP growth rate remained high in the two years after the outbreak of the financial crisis,it began to decline year by year after 2010,and the downward pressure of the economy continued to increase.The booming development of the real estate industry is in stark contrast to the difficult survival of the physical industry,especially private enterprises.Therefore,in order to explore the various inconsistencies between China's large amount of credit supply and economic growth,this paper selects three types of bank credit flow in China that are of high concern for analysis,so as to study the impact of different bank credit flow on economic growth in China.This study provides a reference for guiding the rational flow of credit resources in China,which has very important theoretical and practical significance.In order to analyze the impact of different flows of credit resources on economic growth,this paper first expounds the unbalanced flow of credit in China,and mainly studies the three flows of small and micro enterprises,real estate and the financial system.And then it analyzes the economic development situation after China's reform and opening up.The study found that after 2010,China's GDP growth began to slow down,and the proportion of industrial added value in GDP continued to decline.By contrast,the proportion of added value of financial industry and real estate industry in GDP is getting higher and higher,and the phenomenon of "de-industrialization" of economy is very obvious.Secondly,this paper describes the relationship between the three different directions of credit input and economic growth.The results show that the increase of loan balance of small and micro enterprises has a significant positive effect on economic growth,while the excessive investment of real estate loan balance and internal financial operation funds is not conducive to economic growth.The study found that the largest proportion of internal financial working capital,followed by real estate credit,the contribution to the economy of small and micro enterprises accounted for at least less than 20%.The unbalanced flow of bank credit resources leads to the inefficient utilization of credit resources and hinders the economic growth of our country.The analysis points out that there are three main reasons leading to the unbalanced flow of bank credit: information asymmetry between banks and borrowers,the impact of commercial bank operating principles,and the imperfect capital market.Thirdly,this paper establishes three VAR models to analyze the impulse response of the relationship between total credit,credit flow and economic growth.According to the impulse graph of the total amount of credit and the flow of credit,most of the funds in the expansion of credit scale first flow into the financial system,followed by the real estate sector,which has no significant effect on the financial support of small and micro enterprises.The impulse response graph of credit flow and economic growth model shows that the results are almost the same as those of the theoretical analysis above.The increase of real estate and financial operation funds is not conducive to economic growth in the short term and plays a limited role in promoting economic growth in the long term.However,the increase of credit funds for small and micro enterprises will rapidly promote economic growth,and the impact is very significant.Through the analysis of the two periods of credit and economic growth model,it is found that before the financial crisis,China's credit investment has a strong role in promoting economic growth,and credit expansion has not been able to effectively promote economic growth after the financial crisis.Finally,this paper puts forward relevant policy recommendations to guide the rational flow of credit resources and promote steady economic growth in China,which mainly include the following four points:(1)reducing information asymmetry in credit market;(2)improving capital market and broadening financing channels;(3)strengthening bank management capability;(4)inclining credit policy to rationally guide the flow of credit.Finally,we review the full text and make a main summary.The innovation of this paper lies in that most previous literatures studied the influence of credit allocation on economy from the perspectives of credit allocation region,credit allocation period and industry allocation.From the perspective of bank credit flow in China,this paper empirically studies the impact of three different flows of credit resources on economic growth in small and micro enterprises,real estate and finance,enriching the existing research system.