Research On The Financial Support For The Economic Development In Western China

The development of the west regions is the times' task that decides the economic development tactic structure of China. According to the tactic theory Two Overall Situations" of Deng Xiaoping, the Party Central Committee make some important arrangements before China comes into the 21st century. Now, the economic development of the west regions becomes the core problem that Chinese economic field focus on. As finance plays a more important role in economic operating, it's a necessity to consider the region economic development problem from the financial angle. Finance is the core of modern economy, and financial supporting plays a very important role that cannot be replaced in the system. The development of finance mostly decides domestic economic development of different regions to influence the main operating of macroeconomy.Therefore, how to make full use of finance in the development of west regions and strengthen its supporting power and find the way to support and accelerate the development of west regions, is the most important problem that financial departments should focus on and solve quickly at present.In this article, the author make the relation of financial development and economic growth as the leading theory, critically uses western economics, economics of development, and the principles, methods and research results of western finance theory for reference, and uses the way of uniting history and logics, combining criterion and examples to reveal the significance of financial development from the aspects of finance deepening, the investing and financing system, industrial structure in the background of economy becoming more marketed and open. It analyzes the characteristics, cause of formation, and its restricts to thedevelopment of west regions, and discusses and demonstrates the strategies of accelerating the development of west regions. This article is composed of eight parts, and its main structure and contents are as follows:First, the leading theory. It demonstrates the importance of financial supporting in the conversion period of west regions and the aim of selecting the subject. And it generalizes the main contents and ways of research thoughts.Second, the review and assessments of financial development and economic growth. The theories of economic growth is an important branch of western economics. Generally viewing the developing history of economics, the reasons that cause economic growth, the internal system of economic growth and the way to accelerate economy, is always the core problem of economic theory research. And it's certain to be the most difficult problem. This part mainly demonstrates the main contents of modern economic growth on one side;and on the other side,it simply analyzes the correlations between financial development and economic growth to reveal that financial development supports economic growth greatly in the new economic growth period. And it provides a solid theory basis for the research on the financial supporting problem in the development of west regions.Third, the analysis of correlation mechanism of financial development and economic growth. Through analyzing the basic characteristics of modern economic development and the basic functions of finance, it demonstrates the transmission mechanism of financial development acting on economic growth, analyzes the aggregate relation between financial development and economic growth, and the contribution of finance in modern economic growth. And it demonstrates that financial market and system play an important role in economic growing. The level of financial development is the weatherglass of economic growth, capital accumulation and technical progress, and it deeply indicates that the level of financial development directly influences the way and speed of economic growth.Fourth, the relationship between the fluidity of monetary fund and economic growth in west regions. At first, it demonstrates particularity of regional financial development and economic growth;Second, it analyzes the way of monetary fund fluiding by demonstration, and deeply analyzes the unbalance of regional monetary fund among capital assets investment, banking capital, government budget capitaland foreign investment. It gets a conclusion that the unbalance of capital fluidity is the most important reason that cause the difference of regional economic development. And it also points out that the startup of regional economic growth depends on regional financial support and the ability of accumulating capital and attracting foreign capital. The capital fluidity from central and west regions to east regions will speedup the development of west regions, and slower the development of west regions. We must build reasonable regional capital fluiding system to accelerate the development of west regions.Fifth, the function mechanism of supporting economic development of west regions by finance.At first, it analyzes the background of supporting economic development of west regions by finance and points out that the development of west regions stays in the situation of separation of depositing and investing. On one side, this requires the west regions largely developing its financial market and building numerous, various financial assets, and gradually building a capital market with fluidity. On the other side, the development of west regions stays in the market of restricting requirement, and faces the task of changing the economy. On condition of this, we must increase financial support and practically analyze the conducting course of supporting economic development by finance in west regions. Second, it dynamically discusses how financial development acts on economic growth and points out that the requirements for financial service changes in different periods of economic development in west regions. The more developments economy have achieved, the more financial institutions and forms will be needed to support regional economic development. At last, it analyzes the ways in which the capital is provided and and the important role that financial development has played in accelerating the formation of capital, optimizing industrial structure, inducing business vigor and so on. All of these prove that deep developments of economy in west regions can't live without financial support.Sixth, the practical gist of supporting economic development by finance. Through demonstrations, this part concretely analyzes the actuality of economic and financial development in west regions, efficiency of financial operating. And it demonstrates the relationship between financial development and economic growth. The basic opinion of this part is that the regional structure of our financial andeconomic development shows obvious gradient difference, and financial development in west regions stays in shallow situation. Financial markets in the west regions drop behind east regions not only in number but also in quality. In market economy in which economic growth depends more and more on financial development, the shallow developing finance in west regions will foreclose the advance of west development. Actually, this part demonstrates the importance and urgency of developing finance and enhancing financial support in west regions.Seventh, the experience reference for financial support of west regions. In order to accelerate developments in different regions, many countries have adopted different ways, including many successful examples. Domestically, there are Shenzhen and Shanghai Pudong developing area, and USA and Japanese Hokkaido are good examples. The way they support poor areas by finance provides many useful experiences and revelation to us. Researching these successful experiences will be useful for us to draw strategies of economic development and accelerate economic development in west regions.Eighth, how to select strategies on supporting economic development by finance in west regions. Basing on the analysis above, it points out that we should combine regional practice to innovate and gradually develop finance to accelerate economic growth by financial development. It advances different regional financial policies, deep development of money market, dimensional development of capital market, country financial development in west regions, establishment and perfection of financial system, and suggestions of accelerating economic growth by establishing credit system to continuously develop financial development and economic growth in west regions.