China's Regional Economic Growth, Financial Intermediation, The Contribution Of Comparative Analysis

It has gradually reached an agreement in the theory research that the development of finance is more and more strongly positively related with the economic growth. Financial intermediation' development has many effects on the economic growth which can be included as following. 1. Increase social savings rate. 2. Improve the effective transformation from savings to investment. 3. Improve the resource allocation efficiency. 4 Increase the employment. 5. Promote the economy directly as an important sector of the third industry.Employing the regional time series data, this paper examines the financial contribution to China's regional economic growth from social savings rate, transformation rate from savings to investment and resource allocation efficiency. The study shows that Chinese resident's savings rate is always high since 1990's and financial intermediation has not been playing an obvious role. However, financial intermediation has more and more important effect on the transformation from savings to investment, which is even higher in West China than it is in East China. Nevertheless China's financial intermediation's investment efficiency is low which is better in East China than it is in Mid. and West China, and investment efficiency can determine whether the positive relationship between the financial intermediation's development and regional economic growth exists or not. China's low investment efficiency is mainly due to the low open extent of financial market and state-owned banks' absolute monopoly. During the last two decades, their financial resource allocation efficiency has always been low, which is more obvious in West China.Based on the analysis, it is concluded that (1) China have to build a multi-level system of financial markets, and creating an efficient mechanism for allocation of financial resources. (2) China must continue the financial intermediation's reform, and...