The Order Of Financial Development And The Evidence In China

Financial development is an important part of economic liberalization. Last century, many developing countries deepened their financial system to promote the financial development. But there were outbreaks of financial crisis in almost all of those countries, then Ronald I. McKinnon pointed that there was an appropriate order for financial development in developing countries, one should choose the order according to the constraint of his country.This study mainly based on the framework of institutional economics research. We divided the economic cycle into three parts at first, then we divided the financial development cycle according to the economic cycle. In each cycle, the starting point, the process and the result were analyzed.With analyzing each process of financial development, we mainly described the state of the economic system at the start point. When analyzed the process of the financial development, we mainly listed the changes of the system and the choice of the policies during the period. At last, we commented the effect of financial development during each period.At the last of this paper, we summarized the order of China's financial development. According to the feature of presented-day, we point the policies we should take to ulteriorly develop China's finance in the future.