The Analyzing Of The Chinese Governmental Financial Role Under The Condition Of The Market Economy

The government played an enormous role in promoting banking reform by looking back the reformational course of the state–owned commercial banks for over twenty years in China. So the paper defines the governmental financial role based on summing up the governmental economic functions defined by lots of domestic and foreign scholars. The governmental financial role is that the government acts the economic role in finance just as its name implies, namely, the effects and functions of the government in economy and finance.The emergence of the market failure provides the sufficient theories basis for the government getting involved in financial realm. Therefore, the state–owned financial system is being intervened and directly controlled by the government all the while in China when it was established, which forms the traditional financial role of the Chinese government.The paper probes into the effective ingredients of the cost and the benefit of the direct financial control by the government on the basis of analyzing the characters of the traditional financial role of the government. It is found that the control cost is higher than the control benefit by far and that the direct financial control by the government also leads to unnecessary welfare losses in recent years through the empirical analysis, which provides an inherent prompting for the governmental exit.Therefore, for attenuating the direct financial control by the government as the matting of the gradual exit of the government, the paper expounds two feasible ways by pumping into capital and golden share , respectively aiming at the exit of two governmental inputs—the state credit and the national capital. Subsequently, the paper offers some correlative proposals for the Chinese government which is under the modern market economy to turn to the modern financial role and to establish the prudential supervisory system.