Financial Market Development And Economic Growth In China

This dissertation studies the relationships between financial market development and economic growth in China. Based on the conclusion and induction of the financial development theories, financial market theories and economic growth theories, this dissertation redefines the concepts of finance, financial development and financial market; defines the financial market development; induces the different viewpoints about the relationships between the financial development and economic growth; establishes the conceptual analysis frame; retrospects and analyses the history and reality of financial market development and economic growth in China; judges the situation of financial market development in China; concludes a relatively moderate model for the economic growth in China; uses empirical tests to verify the theoretical hypotheses in a quantitative method; finds that there was non-coordination between financial market development and economic growth in China and the study had a special analysis on this, some regulation measures and strategies are given to deal with the non-coordination problem between financial market development and economic growth in China, some research findings and policy suggestions are concluded in the end.1. Main Contents in the thesisThis dissertation studies the relationships between the financial market development and economic growth in China.The main contents are listed below:(l)the history and reality of financial market and economic growth in China;(2)the empirical research on the relation of financial market and economic growth in China;(3)the analysis on the non-coordination problem between the financial market development and economic growth in China;(4)the regulation on the non-coordination between the financial market development and economic growth in China;(5)the policy suggestions on coordinating the relation between the financial market development and economic growth in China.2. Basic conclusions in the thesis(1)The financial market development in China experienced the process from governments' direct administration to the gradual determination, adjustment and control by market and to deepening marketilization. And Chinese financial market development has typical characters oftransitional economy and reflects that the credit market development is the primary financial market in China, then security market and insurance market as supplement. The credit market development in China experienced the procedure of credit scale enlargement year by year while its market institutions and personnel experienced the increasing enlargement first and then reduced them gradually, from extensive operation to intensive operation, and the interest rate changed from control to increasing relaxation through marketilization reform, the whole market was developed from the primary planned regulation to commercialization to the slow development of marketlization, and in the field of financial market most of resources are concentrated on the credit market. Compared with the credit market, stock market in China began to work late. Although the market scale expanded constantly, the total volume was not large enough so that the direct financing function of Chinese stock market was limited. Meanwhile, the number of listed companies increased year by year and the number of investors in general was enlarged continuously, the reform of general adoption of market discipline in Chinese stock market was advanced step by step, in Chinese stock market the stock right experienced an important reform from departure for many years to combination, the rules of issuing and listing and barging in the stock market were improved constantly. Chinese bond market was mainly the government bond market, the issuing of the government bond market experience a process from administrative quotas to assuring the sell and buy to no material object, the establishing of barging market of government bond was late, the types of investors in bond market beneath the banks were expanded continuously; the issuing of enterprise bond experienced a process from inner in private to facing social public, the issuing units were changed from small enterprises to village-and-town enterprises to state-owned enterprises, the scale of issuing and barging of enterprises has been keeping a relative low status. The insurance market in China experienced a process from the only one people's insurance company of China to establishment of other domestic insurance companies to the entering of foreign insurance companies diminishing the whole monopoly by state-owned insurance companies; the scope of management of insurance companies expanded constantly, but the scale in total of Chinese insurance companies still isn't large.(2) To Chinese economic growth, the development road or model for reference is that it is transferred from labor intensive and fund intensive to technology intensive aiming the knowledge intensive in a period ,enabling the finance and resource disposing function of financial market. Enabling the finance and resource disposing function of financial market,China should keep proper level of labor and fund, assure contribution to economic growth under definite amount of factors, raise largely the level of factors productivity, develop intensive type of economy, adjust properly the structure of industry, lift the ratio of third industry development keeping the normal development of second industry, raise the level of research and development by itself through purchasing the advanced foreign technology,absorbing and technology creation driving the development of set of technology intensive industry, develop high-tech and join international competition forming high-tech industry chain, keep relatively high rate of investment and level of export and lift the ability against change of industries in home and abroad market, develop properly transnational enterprise group, doesn't restrict investment abroad of home fund only if meeting the needs of home fund, continue to bring into effect the strategy of export and home requirement, keep a proper level of foreign debt and proportion of foreign direct investment and indirect investment, establish a system against risk avoiding financial foam.(3) Since "reform and opening" , the macroeconomy of China basically has been keeping a calm,rapid and continuous tendency of economic growth.The development of Chinese credit market accelerated the economic growth in China and conversely the economic growth in China accelerated the development of Chinese credit market,there are mutual accelerating relations between them,which is the mainstream of the development of financial market in China,in the meanwhile, the mutual relation between Chinese stock market,bond market and insurance market and the economic growth isnot outstanding. As a whole of financial market, the development of financial market appears the positive correlation to the economic growth in China ,and the correlation may be nominal for most of situations, real only for few situations. Since "reform and opening" except 1989, the total volume of real economy of China has been keeping a developing tendency of upper increase year by year, increase rate over 5%, except 1988 and 1989, as increase rate of total volume of real economy, the increase rate of per capita GDP has been keeping a level of over 5%. The economic growth in China is the result that China persisted "one center, two basic points" especially the gradual style of "reform and opening", To abnomal affairs met in economic growth, Chinese government strived to deal with avoiding these impulses.In China,the development of credit market accelerated the economic growth,the economic growth accelerated the development of credit market.The development of Chinese stock market basically didn't accelerate the economic growth in China, and the function of the economic growth in China to the development of Chinese stock market should be analyzed according to the situations,periods and submarkets. To some series, the economic growth in China appeared that it didn't do benefit for the development of Chinese stock market or didn't has a apparent function to, and to other series, it appeared that there is a positive correlation between them, it was real sometime and nominal other time for acceleration each other between them. To few situation, the development of Chinese enterprise bond market accelerated the economic growth in China and vice versa, but to most of situation they didn't accelerate really with each other, the positive correlation between the development of Chinese bond market and economic growth only illustrates that they might be nominal. Except few situations, there weren't basically real relations between the development of Chinese insurance market and the economic growth, the positive correlation between them might be nominal.3. The important viewpoints in the thesis(1)The structure of Chinese financial market system isn't reasonable, still keeping credit market as main body and stock market,bond market,insurance market as additional.(2)The relation of function between financial development and economic growth covers basically the relation between the development of financial market and economic growth, but there is a special point among the relations between the development of financial market and economic growth, which appeared that there was no interaction between them.(3)As a transferring-type developing country, the development of Chinese financial market experienced a gradual-style reform in which plan system got gradually light and market system established gradually, and a process from financial market widening in extensive style to financial market deepening in intensive style till basic opening to foreign countries, Chinese financial market is still relative young and not grown-up.(4)The economic growth in China is the result that Chinese government strived the "reform and opening " policy. the model of the economic growth in China may be taken that China keeps the labor intensive for a period of time and transfers from fund intensive to technology intensive in the meantime aiming to knowledge intensive.(5)The important reason for which the development of Chinese financial market and economic growth didn't accelerate with each other is that the running of Chinese financial system wasn't smooth with the "jam" in the way of interaction. So, China needs the reform of general adoption of market discipline to financial institution, enriches the financial market instruments and sets up perfect financial market system.4, The creations in the thesis(1)It sets up new framework of concept analysis and constructs a index system fitting for measuring the development of financial market.Because of exsting many different explanations on the concepts concerning to the development of financial market or no definite defines and Based on the absorbing the essence of concepts in the past, it defines the concepts of finance,financial structure,financial market and the development of financial market in a new way enriching the essence of financial development. To the situation lacking of perfect index system measuring the development of financial market and according to the main structure of financial market in China,it sets up separately the indexes of all sub-markets in three directions of the correlation rates of market,running efficiency of market and the pulluation of the market for credit market,stock market,bond market and insurance market with amount of indexes 37 in which most of them are new, this forms the foundation for the further research of the relation between the development of financial market and economic growth in China.(2)It explores the non-harmonized problems between development of Chinese financial market and the national economy. By the graphic analysis on the indexes,it finds the non-harmonized phenomena between institution efficiency of credit market,stock price index,real amount of issued bond,real income from insurance fee and economic growth, stock price index and real amount of issued bond serious among them, and so tests and verifies the view that there is non-harmonized phenomenon between Chinese financial market and economic growth. To the reality that none hasnot perfectly studied the problem now, this dissertation makes deep reseach on it by exploring the non-harmonized detailed status existed among the development of Chinese credit market,stock market, bond market,insurance market and national economy and analyzing the reasons and influences of these status.(3)It sets forth fertilizing and protecting strategy of financial market ecological environment,which does better for coordinated development between financial market and economic growth.Based on the checking relative concepts and theories of financial ecological environment and in accordance with the phenomenon which now the ecological environment of financial market is neglected comparatively, it defines the concept of ecological environment of financial market and states the standard judging the situation of ecological environment of financial market.According to the situation of Chinese ecological environment of financial market, it still sets forth fertilizing and protecting strategy of financial market ecological environment,which does better for coordinated development between financial market and economic growth.