China's Financial Repression And Economic Growth

The dissertation is divided into eight chapters, which, in the frame of financeand economic growth, explore the reasons why the economic growth continues bythe internal logic. The first chapter puts forward the background of question. According to thetheory on the finance and growth by western economists, the economic growth wassupported by well-operated financial system decided by good legal system. But inChina, there is neither of two, now what propels so long growth? Now that the growth should be explained, I must make clear its reasons, whichis the task of the second chapter and by which, I divide China growth into threestages: the first stage, from 1978 to 1984, in which, the spring of growth isagricultural reform e.g. household responsibility system which changes themotivation of peasants, improve the production efficiency, and formed a market forthe TVEs to be born; the second stage, from 1984 to 1991, in which, the spring ofgrowth is labor transferring from land to TVEs, from inland to costal east and thelabor transferring promote the growth mainly through allocation efficiency; the thirdstage, from 1991 up to now, in which, the spring of growth is investment, and whichis the emphasis for dissertation. So it induces a question e.g. if growth is fulfilled through investment, then theenterprises financing is very important, needed to be accounted for and which is thecontents of the third chapter, and through the third chapter, I find there exist fivecharacteristics in enterprises financing: 1. for all national enterprises, the firstfinancing source is self-financing, and bank loans, the second; 2. for foreign jointventure and hongkong macao joint venture, the main financing is the use of FDI; 3.there is substitution between other sources financing and national loans; 4. nonstate-owned enterprises investment and its financing is not proportionate reasonably;5. other financing sources are very vague, not including items in details. The five features get the next question out e.g. whether there exits a curb marketfor non state owned enterprises, as is answered in Chapter 4. Chapter 4 discusses thefinancing curb market concretely, now, we should ask: why the financing curbmarket occurs and why the non state owned enterprises, not state owned enterprisestake advantage of them? As a matter of fact, it is obvious that in China, there exists financial repression, 第 6 页 共 147 页 英文摘要 and so Chapter 5 dissects it reason and some phenomena. Meanwhile, Chapter 5induces the core question: why in the condition of financial repression, of courseincluding the lack of the law and finance environment, the growth can maintain solong? To this question, chapter 6 and chapter 7 give the answers. In chapter 6, I putthe emphasis on the effects of bank loans to SOE, and I conclude that the bank loansto SOE sacrifices part of economic growth, which maybe obtain other things such aspolitical stability and gradual transforming of SOE. Chapter 7 analyzes the relationship between the growth and curb market in theangle of potential financing to non state owned enterprises from curb market; I findthe variable on curb market has good fitness of economic growth. So I can concludethat the curb market is very significant to economic growth in China, even if not thefirst factor, but a very important one. The last one, Chapter 8, supplements the previous explanations from therelation between law and economic growth.