Study On The Interactive Relationship Between Banking System And Real Economy Development In China

Banking system plays an important role in financial systems of a country. In current China, with the capital market less developed, banking system is of great importance.Since Joseph Schumpeter who began to study on the relationship between finance and economy growth, many researches studied on this and have got some achievements. But there still exist many defects and shortages. For example, there are only a few documents about the interactive relationship between banking system and real economy. In addition, most former models mainly discuss the impacting mechanism of banking system towards economy growth and how banking system impacts the economy system. However, there is little study on the mechanism and the way of economy growth influencing banking system, especially on the interactive relationship between them. To study the impact of entity economy fluctuation on bank system fragility is of great value to financial system reform and banking system construction.Qualitative and quantitative methods are mainly adopted in the dissertation. As commercial banks play important roles in the entire banking system, author use the data from commercial banks to represent banking system for quantitative analysis.This dissertation mainly.discusses:Firstly, the mechanism of how banking system promotes real economy development in China. In this dissertation we derived the drive mechanisms of central banks, policy banks and commercial banks to the real economy.Secondly, to study on the relationship between the structure of banking system and real economy development. In the dissertation, the author analyzes the impacting way of banking system on real economy development through the study of the bank credit structure, property structure and regional structure. And it adopts SCP analyzing frame to analyze the internal relationship of the structure, behavior and performance of China's banking system. In the dissertation, the author measures and calculates the performance level of China's banking system by way of DEA and makes empirical research and analysis of the performance level of China's banking system and its relationship with economic growth. The author takes Jiangxi as an example and discusses the relationship between China's district banking system development and district real economy. The results show that with the banking structure optimization, the bank performance is improved, especially the. four major state-owned banks, which promoted the growth of real economy.Thirdly, to study how real economy development impels banking system. The author summarizes the historical changes of world banking system and banking system in China, studies the route dependence problem of banking system transitions and the role of real economy development in these transitions, then get the result that mandatory transition should be supplemented by induced transition.Fourthly, to study on the relationship between the fragility of banking system and the fluctuation of real economy. The author analyses the fragility of China's banking·system qualitatively and quantitatively. From China's reform and opening, judges the extent of fragility of banking system ranging from 1978 to 2008 and marks with dummy variables. Logit model is applied to positive analysis of the macroeconomic variables, financial variable and exterior factor variables that influence the fragility of China's banking system. The results show that inflation rate, savings rate are significantly positively correlated with banking fragility.On the foundation of above study, we put forward the following policy suggestions:Firstly, develop the institutions in banking system. By referring the bank system construction experiences from other countries, combined with our country, we can perfect the banking system in China and accelerate the development of the entity economy.Secondly, optimize the structure of the banking system. To further optimize the structure of bank system of East and West, urban and rural structure and ownership structure, reduce the concentration of banks. Control the number of banks and expansion and develop the banking system connotatively.Thirdly, strengthen the induced institutional transitions. Promote China's banking system, institution distribution business, ownership change. Induced institutional change should become the main way of China's banking system combined with mandatory transition.Fourthly, reduce the inflation rate and the stability of the savings rate. Establish deposit insurance system to reduce the fluctuation of entity economy, and to lower the fragility of banking system.Fifthly, promote the banking system and the entity economy. On the one hand, it can accelerate the upgrade of entity economy and development of mid-west and rural areas in China and accelerate the development of small and medium-sized enterprises. On the other hand, it can promote the periodical supervision of banks and try to avoid banking system's restriction on real economy development. Actively match the government's industry policy and the need of transformation of real economy and ensure the coordinate development of banking system and real economy.