Inclusive Financial Development And Poverty Alleviation In China

Despite the rapid development of economy,science and technology at present,poverty is still the "tumor" in all kinds of problems arising in the world,and eradication of poverty has always been the greatest goal and the biggest challenge in the human world.The World Bank has set the goal of eradicating extreme poverty by 2030.As the first developing country in the world that has achieved the goal of poverty reduction in the Millennium Development Goals,the Chinese government has been actively devoted itself to the cause of poverty eradication,energetically seeking various domestic and foreign cooperation on poverty alleviation,combining multiple inclusive financial policies,and advancing the implementation of targeted poverty alleviation policies,thus providing valuable experience for the international poverty alleviation model.This paper determines the effects of inclusive finance means on poverty alleviation by focusing on the study into the relationship between inclusive finance development and poverty reduction.This paper:1.reviews the theoretical literature on inclusive finance,poverty and the relationship between them;2.builds the system for measurement of inclusive finance development with ten measurement indexes from five dimensions,namely service scope,use efficiency,insurance,Internet and penetration of payment by reference to the system for measuring inclusive finance development developed by Cupte(2012)and Internet Finance Research Center of Peking University and adopts factor analysis to measure the development of inclusive finance in 31 provinces of China and ranks these provinces;3.selects Engel's coefficient and PCDI(Per Capita Disposable Income)as poverty measurement indicators to carry out a descriptive analysis of China's poverty status;4.analyzes the mechanism of effects of inclusive finance on poverty reduction from macro and micro perspectives,and selects data on 31 provinces in China to make an empirical analysis of the relationship between inclusive finance development and poverty reduction by using panel data regression method.Based on the above estimation results,the paper concludes that the inclusive financial development is negatively correlated with Engel's coefficient and positively correlated with PCDI.Additionally,there exist a non-linear correlation between,on one hand,inclusive financial development and on the other hand,Engel's coefficient,PCDI,a "U-shaped" relationship between inclusive financial development and Engel's coefficient and an inverted "U-shaped" relationship between inclusive financial development and PCDI.These indicate that there is inflection point with respect to the effects of inclusive finance development on poverty reduction in China.The inclusive finance has a positive effect on poverty reduction in China before reaching the inflection point,and produces an inhibiting effect after crossing the inflection point.