Research On The Financial Support System Of New Urbanization In China

What urbanization refers to is the process where the original rural population gradually becomes urban population, which is an essential historical stage of industrialization. Contributing only limited structure efficiency, scale efficiency and efficiency of labor division to economic growth, the defects and disadvantages in the traditional urbanization pattern are quite obvious, therefore, urbanization is under big pressure to transform, hence, promoting new-pattern urbanization and constructing its support system is imperative. The support system of the new-pattern urbanization should include financial support system, public service support system, macroeconomic control system, industrial support system and so forth, among which, the financial support system should be of the highest significance. To successfully promote the new-pattern urbanization, it is obliged for China to first solve problems like financial development lagging behind, structural mispairing in capitalization etc., and then conduct reforms in the financial system to quicken the modern development of the financial system. This paper mainly focuses on the effects of the financial support system has on urbanization, analyzing to what extent the former affects every index of the new-pattern urbanization and estimating the efficiency changes of the financing scale and the changes of quality under urbanization. Based on the above analysis, the paper provides China constructing healthy investment and capitalization mechanism and increasing the quality of urbanization with related countermeasures.It is believed in this paper that no matter how the speed, degree and schedule of urbanization are planned, the transformation of urbanization should always comes first to realize the coordination between the transfer of population and the remodeling of other factors. During urbanization, economically active population is delivered as labor factor to every urban department, in the meanwhile, all urban departments have to optimize and reset other generalized factors namely capital, technological innovation and production and management innovation. These three aspects correspond to the employment volume, urban industrial structure and entrepreneurship of urban and rural residents respectively. In order to propel the three aspects and to coordinately propel the optimal allocation among factors, the financial system should make adjustments, specifically, making institutional innovation and optimization in financial scale expansion, structure optimization as well as innovation. After the introduction, literature review and general framework, the empirical analyses in chapter4,5and6respectively discuss the relation between financial scale and urban employment volume, the relation between financial structure and urban industrial structure, and the relation between financial innovation and entrepreneurship of urban and rural residents, and in chapter7,1undertake an overall verification to testify the relation between financial diversity and the general quality of urbanization.Chapter4proposes a hypothesis that the new-pattern urbanization requires the urban non-agricultural department to create more employment, thus financial scale expansion is needed. By using the panel data consists of statistical data from1997-2012about all China’s provinces, I apply GMM to run an empirical test to find that financial scale expansion is capable of increasing the employment of urban non-agricultural department, and this effect tends to decrease progressively. To deduce, when incentive effect and twist effect achieve a balance, financial scale expansion should come to a stop to save more efforts for optimizing financial structure and financial innovation.Chapter5proposes a hypothesis that advanced financial structure facilitates the optimal allocation of innovation resources among departments to upgrade urban industrial structure. By using the panel data consists of statistical data from1997-2012about all China’s provinces, I run an empirical test to find that advanced financial structure can observably help upgrading urban industrial structure, and this effect tends to be even evident in areas where capital-intensive industries have a high proportion. To deduce, the density of capital use has a crucial impact on industrial structure effect of financial structure so that all areas should analyze the initial features of local industrial structure, based on which they can develop their own financial intermediaries and markets without violating the evolution law of industrial structure.Chapter6proposes a hypothesis that financial innovation is the driving force and consequence of modern financial development which facilitates the entrepreneurship of urban and rural residents. Taking the relation between rural financial innovation and rural residents’ entrepreneurship and using large sample data acquired from investigations about rural residents in7provinces, I apply Logistic Regression to run a test to find that financial production innovation, organization innovation, business innovation and propaganda innovation all significantly facilitate rural residents’entrepreneurial intention in long-term and conditional entrepreneurial intention while rural residents’entrepreneurial intention in short-term is relatively prudent. Financial innovation, specific to rural residents’ production loan, must be combined with local entrepreneurial environment and urbanization foundation to regard the micro-penetrability of financial institution service and urban and rural residents’ needs.After analyzing whether the driving force of new-pattern urbanization can get financial support, this paper undertakes a comprehensive measure for the overall quality and financial diversity of urbanization. Controlling other variables, an empirical analysis is conducted to test the relation between the overall quality and financial diversity. The result suggests that the financial diversity can evidently improve the overall quality of urbanization, and this effect tends to astringe among all areas and has lagging characteristic. The new-pattern urbanization not only gets its driving force from the development of modern finance, its quality indexes also have a significant link with the development of modern finance.The theoretical and empirical analyses suggest that1) a large percentage of the lagging process of China’s new-pattern urbanization is due to the slow development of modern finance;2) the financial scale, structure and innovation being improved and developed enables the optimal allocation of all factors in the process of urbanization to promote new-pattern urbanization;3) financial support can have different impacts on various areas’ new-pattern urbanization, probably because of the restriction from initial factor endowment, industrial structure or the speed of urbanization. Therefore, financial support being an important guarantee for the new-pattern urbanization also needs to be combined with other support systems.On the basis of all the above conclusions, this paper proposes a way to optimize the financial system which is guided by new-pattern urbanization, where some requirements are raised to regulate financial policies and supervision departments, commercial finance institution and policy-based finance institution, as to what kind of innovation activities should they hold, what kind of physical measures should they take, what kind of incentive mechanism should they base on, picturing a policy-based support system of coordination between China’s urbanization and financial development in future.Possible innovation in this dissertation includes:1) concerning the financial support system of new-type urbanization from the perspective of fully developed modern finance;2) discovering many problems in new-type urbanization and primarily estimating the drag effect the lagging development of finance has on the transformation of urbanization;3) observing the heterogeneity of the financial support system of urbanization among regions when analyzing the relation between financial development and new-type urbanization and digging its reason. By analyzing, this dissertation fills the void of existing literature, not only depicting the future financial support system of new-type urbanization but also finding the orientation of all financial subjects with respect to the transformation of new-type urbanization.