.1992-2003 China's Financial Structure And Financial Development

This paper based on Goldsmith's study on financial development and discuss about the financial development status in China today. There's close relationship between financial development and economy development. And it is important to understand the structure and standard of the country's situation of financial development and financial structure to study the country economy. Therefore, a series of index is necessary to see the details of the country's financial developments.Many researches show that the most reasonable index series for financial system is from Goldsmith, who collected data from 35 countries during over 100 years in the 1960s. He analyzed data from different countries and created reasonable formulas, which led to the key of financial index, FIR, as well as many complimentary index.However, the research of Goldsmith is mainly focused on western countries, rarely some information useful for Asian countries expect Japan. It is necessary to take a close look into Asian countries, especially China, to get sufficient understanding of financial structure and development situation.This paper is written under the hypothesis that the financial development theory from Goldsmith is correct. And financial and economic data of Chinese economy since 1978 has been collected and adjusted to imply the financial structure and developing status in China nowadays. FIR has been increasing ever since 1992, and experienced different periods of financial development. Meanwhile, financial instrument is increasing both in amount and functions, which implies the structure of financial system in China is in the trend of multiple developments.