Study On The Financial Support System Of State- Owned Forestry Region Sustainable Development

In 2012, the construction of ecological civilization was put to the strategic level by 18th National Congress of the Communist Party of China, and the "five in one" overall layout of the socialist China characteristics was formed, in which ecological civilization construction was as important as the economic construction, political construction, cultural construction and social construction. This means that ecological civilization construction and economic transformation and upgrading must be implemented in order to achieve sustainable development of China’s state-owned forest zone and balance of ecological benefits, economic benefits and social benefits. Therefore, based on sustainable development theory and regional finance theory, this paper studied on construction and optimization of financial support system of state-owned forest.This paper follows the research ideas " what - why - how". At first, the current situation and problems of financial support system of state-owned forest areas in China was discussed. Then based on financial function theory, the mechanism of financial support of ecological-economic-social subsystem of state-owned forest was studied. At last, optimization of financial support system of ecological-economic-social subsystem was proposed after financial support effect evaluation.At present, the main sources of funding in China’s state-owned forest zone is still central and local government finance, which was followed by financial institutions and financial markets. With the deepening of reform and opening-up, the construction and development of the state-owned forest zone has also been supported by social capital, private capital and foreign capital. However, because of the imperfect financing channel and incomplete financial support system, forestry enterprise financing excessively dependent on government investment and bank loans, resulting in high asset-liability rate and business risk. Comprehensive evaluation and comparison of financial support efficiency of China’s state-owned forest zone was conducted by the Malmquist index based Data Envelopment Analysis method (DEA), and the results show the structure of in financial support system was imbalance during China’s state-owned forests.Then the internal mechanism of financial system supporting ecological, economic and social subsystems of state-owned forest was analyzed by combining demand and supply of financial support. That is, to promote the strategic development of ecological subsystem by fund raising function, to promote the transformation and upgrading of economic subsystem by fund guidance function, to promote the balanced development social subsystem by risk control function, and to achieve joint development of state-owned forest zone and financial system. A quantitative analysis of China’s state-owned forest zone development was done by panel vector autoregressive model (PVAR). It results that the funding and output value of China’s state-owned forest zone was fast grown in last 10 years, however, the ecological environment hasn’t improved significantly, and long-term mechanism of financial support was lack.Based on the panel data of Chinese 9 state-owned forest region in year 2003-2012, financial support effect of ecological, economic, social subsystem was evaluated by two-way fixed effect model and the feasible generalized least squares regression model. The results show that:(1) The construction of ecological subsystem of the state-owned forest zone has a long-term and steady demand for financial support system. However, there is a lack of fund channel, unbalanced and irrational investment structure. Further development of fund channels and innovation of financial tools was suggested for financial support of ecological subsystem of state-owned forest zone. That is, to give full play to the guide and support role of policy finance in infrastructure construction and ecology technology innovation and transformation; To give full play to the optimal allocation role of commercial finance and private finance; And to gradually explore innovative financial products and services in the ecological subsystem, including the establishment of state-owned forest ecological environmental protection funds, assets securitization products and mechanisms of state-owned forest resources, as well as the development of carbon finance system and product.(2) Unreasonable structure, inefficiency economic benefits, and high industrial risk exsits in financial support on three major industries of economic subsystem of the state-owned forest zone. Further promotion of structure and efficiency was suggested for financial support of economic subsystem. That is, to give full play to the guide and support role of policy finance in Under-forest economy, cyclic economy, ecological tourism and technology service industry; And to establish and perfect the forest insurance system, in order to resist forestry economic risk, and promote steady development of economic subsystem.(3) There are lack of social funds and private capital investment in the construction of social subsystem of state-owned forest zone. Further expansion of financial support coverage was suggested for financial support of social subsystem. That is, to encourage financial institutions, commercial banks, social capital and private capital to support development of Inclusive Finance and micro finance, especially social services, in order to improve people’s living level, social welfare level and labor productivity, and promote sustainable development of ecological, economic and social subsystem of state-owned forest zone.