VAR Empirical Analysis Of Relationship Between Bank Credit And China's Economics Growth

Since more than 20 years of reform and opening up, China's economy has kept a fast developing momentum with an annual average growth rate of 9% all the time, calculated by fixed price. China's GNP rose to 11,669,400 million Yuan in 2003 from 362,410 million Yuan in 1980. Meanwhile, the financial department of China grew vigorously, total amount and structure of the financial assets also changed enormously. On the initial stage of reform and opening up, there was only one financial organization. That's the People's Bank of China, it granted some flowable loan to enterprises according to the credit plans. However, the financial organizations increase day by day now, total amount of the financial assets increase greatly too.During this period, both bank loans and real GDP of China have all realized fast growth. The variation tendency of them is identical, with analogous moving circle, starting and terminating points. It shows that the obvious correlative relationship exists between them. But for the mechanism and causality behind this relationship, is it a certain coincidence? Or has any other reasons on earth? It needs us make further analysis.Chapter 1 of the paper has reviewed the origin theories of bank credit and economic growth briefly, and then appraises the evolution of these theories. Chapter 2 analyzes the current situation of bank credit and economic growth of China and the macro-economy background related to their change in recent years. Chapter 3 constructs VAR model and makes empirical analysis on the basis of collecting relevant data, drawing the following conclusions: First, the positive bidirectional correlative relationship exists between bank credit and economic growth of China, having proved that the bank credit has certain facilitation to the economic growth, the economic growth promotes the growth of credit at the same time; Second, the utilization efficiency of the credit funds demonstrates the downward trend. Third, the impulse response on economic growth of the state-owned loan is great, the effect is slow. While the impulse response of non-state-owned loan is low, the effect is fast relatively.Chapter 4 of the paper makes economic explanation to some conclusions from the preceding model, finding out the reason why loan has developed so fast in China in recent years, and the reason why utilization efficiency of credit funds is low. Finally, the paper proposes we should adjust and improve the credit structure of commercial bank of China, forming appropriate credit's scale, increasing credit amount to non-state-owned economy in order to raise utilization efficiency of bank credit funds and promote the national economic growth.