Research On The Impact Of Digital Inclusive Finance Development On The Urban-rural Income Gap In Sichuan Province

After the reform and opening up,China’s economy has developed rapidly,per capita disposable income has grown rapidly and the quality of life of urban and rural residents has improved significantly,but the absolute gap between the incomes of urban and rural residents is still large.In his report to the 20 th Party Congress,General Secretary Xi Jinping stressed that the essential requirement of socialism with Chinese characteristics is common prosperity,a historical process that needs to be adhered to in the long term.2023 Central Government Document No.1 proposed to broaden the channels for farmers to increase their income and get rich,and to continuously reduce the gap between urban and rural development.With the rapid progress of technology,digital inclusive finance plays an important role in reducing the income gap between urban and rural residents.This is because digitally inclusive finance can lower the threshold and cost for the financially disadvantaged to participate in financial services,reduce financial exclusion and raise the income levels of low-income people.Sichuan Province,an important economic province in western China,is well represented.Firstly,the research results of scholars at home and abroad are combed to theoretically analyse the mechanism of the role of digital inclusive finance on the urban-rural income gap and put forward hypotheses.Secondly,the analysis of the current situation reveals that digital inclusive finance has been developing in Sichuan Province in recent years,with a trend of year-on-year growth and a narrowing of development differences within the province;the urban-rural income gap in Sichuan Province is generally on a declining trend.Finally,the data of 95 counties in Sichuan Province from 2014 to 2020 are selected for empirical research to analyse the impact of digital inclusive finance on the urban-rural income gap,and the actual impact on the urban-rural income gap is compared and analysed from the perspective of three sub-dimensions,and robustness tests are conducted.The findings show that,firstly,digital inclusive finance in Sichuan Province has led to a narrowing of the urban-rural income gap.Second,the continuous development of digital inclusive finance in Sichuan shows a significant non-linear effect in narrowing the urban-rural income gap: in the early stage of digital inclusive finance development,it can reduce the urban-rural income gap,and when the development exceeds a critical point and reaches a certain inflection point it will lead to a widening of the urban-rural income gap.Third,all three dimensions of digital inclusive finance in Sichuan province,namely breadth of coverage,depth of use and degree of digitisation,have significant effects on narrowing the urban-rural income gap,but the effects of the three dimensions show heterogeneity.In terms of narrowing the income gap between urban and rural residents,the depth of use and the degree of digitalisation play a more pronounced role than the breadth of coverage.Based on the above findings,this paper proposes countermeasures in four aspects: improving financial infrastructure and constructing a digital rural area;improving the regulatory system of digital inclusive finance;enhancing the sub-dimension of digital inclusive finance and promoting coordinated development;and improving farmers’ financial literacy and participation.