| Agriculture is the foundation on which the mankind lives to develop with the society as well as the foundation of the national economy. It is clearly specified in "The Twelfth Five-year Plan of the Development of National Economy and Society of People's Republic of China" that to resolve rural problems and narrow the gap between urban and rural areas is the most arduous and hardest task as well as the key to a well-off society in an all-around way and the socialist modernization. In recent years, China's socialist market economy system has been constantly improving and perfecting. Under the macro background of high-speed growth of economy and the transition of national economy into the socialist market economy, the economic development in the rural areas in China steps into a new round high-speed development stage. The role of agriculture in the whole national economy has been further enhanced. China is a large agricultural country and the high-speed economic growth in rural areas is the most important guarantee for the harmonious, healthy and rapid development of the whole national economy. For historical and realistic causes, Chinese agriculture has always been in a relatively laggard state and the per capita income of the rural areas is at a low level. The relative laggard status of economic development in rural areas has seriously restricted the economic development of China.As the development of human society, the role of finance as the core of the increasing of modern economy has already been recognized by many scholars. At present, the various services provided by finance have already penetrated into all aspects of the society and increasingly influenced people's life in a comprehensive way. As the improving and perfection of socialist market economy as well as the constant extending of the functions of financial service, finance has already become a key factor to determine whether the resource can be effectively allocated in an economic entity. The acceleration of economic development requires focusing on financial services. Finance and economy are inseparably interconnected. The development of finance must be based on economic development and the finance shall also exert influence on economy when it provides services for economy. Finance plays a critical role on market resource allocation. At present, the most important task of economic development in Chinese rural areas is to promote the transition of rural economic structure, and promote the urbanization process so as to transfer the surplus rural labors, which requires a great number of capitals and investment as well as the supports from the financial system. Especially at the beginning years of "the twelfth five-year plan", the construction of the new socialistic countryside steps into a new stage. The constant development of rural economy puts forward higher, newer and wider requirements for the rural financial system.In the past, foreign studies on rural financial and economic growth mostly positioned their objects at a national level but in recent years, some scholars start to study it at a provincial or municipal level, but there are still few studies on this aspect, especially those which focus on Inner Mongolia Autonomous Region. Therefore based on the economic and financial data of the past years of Inner Mongolia, the empirical study on the financial development and economic growth of Inner Mongolia possesses relatively high theoretical values and realistic significance in putting forward suggestions on policies.The Inner Mongolia Autonomous Region in this study is located in the northern border area of China, sparsely populated. The unique topographic and demographic features make the rural pastoral economy play an irreplaceable role in the economy in the autonomous region. The economic growth in the agricultural and pastoral area becomes an important factor in the economic take-off of the autonomous region. For the past thirty years since reform and opening-up, Inner Mongolia Autonomous Region witnessed sustainable development. Especially for the ten years of the development of the west regions, Inner Mongolia Autonomous Region witnessed a high-speed growth. In the past thirty years, Inner Mongolia Autonomous Region has achieved the transition from long-term low-speed development to great-leap-forward development. The regional GDP has increased from less than 6 billion to more than one thousand billion in 2010 and the financial revenue has increased from less than 1 billion to more than 170 billion in 2010. Inner Mongolia Autonomous Region has achieved a historical transition from depending on national relief to making contributions to the nation. People's life transfers from struggling at the poverty level to stepping into a well-off society.As the take-off of economy, the dualistic economic structure of Inner Mongolia Autonomous Region is becoming increasingly prominent. Modernization, industrialization, urbanization, informatization and marketization have brought a powerful motive force for the development of Inner Mongolia. However the problems facing agriculture, rural areas and farmers which universally exist in China are still bothering Inner Mongolia, which even becomes the major bottleneck for the stable development of Inner Mongolia. Inner Mongolia is unique in its topographic feature where natural disasters happen frequently. The problems such as the slow growth of rural economy, lagging behind of modern agricultural and pastoral industry, difficulty in increasing farmers'income, the widening income gap between urban and rural residents as well as the poor infrastructure and social undertakings in rural areas are becoming more and more serious, which have already aroused great concern of decision-makers and scholars.Through observation, we find that at present, the financial development in the rural areas of Inner Mongolia is at a poor level and the financial resources and services can not satisfy the financial requirements of "Three Rural Issues", which to a great extent blocks the further development of the economy in rural areas. Since the reform and opening up, the government of Inner Mongolia has issued a series of agricultural and animal husbandry policies, which provides a guidance and guarantee for the economic development in rural areas. All financial institutions in Inner Mongolia start to provide more supports for the rural areas. Agricultural loans increase sharply and the finance in rural areas has made great achievements as the economy grows more quickly. But at the same, we should notice that the dualistic financial structure in Inner Mongolia is still extremely prominent. The dualistic opposition in finance of urban and rural areas is still very significant. The finance in urban areas is relatively prosperous, but the financial system in rural areas is not complete. There are few financial resources and financial supply and the financial system reform is lagging behind, which can not satisfy the demands of the economic development in rural areas and become the bottleneck for the balance between urban and rural development in this regions. Especially in these years, the regular financial institutions in rural areas has shrunk greatly, a large number of household savings outflows, financial product and service is too simple and the agriculture-supporting function of finance is weakening. These problems are becoming more and more prominent, which illustrates that the finance in the region has not played its due role in the economic development in the rural areas. Significant financial repression exists. Therefore, in recent years, Economic Working Conference of Inner Mongolia Autonomous Region has always emphasized that the foundation to achieving a good and fast economic development of Inner Mongolia Autonomous Region is the agriculture and animal husbandry and the key to the economic development of rural areas is to solve the financial problems.Through the application of relevant theories on economic growth and financial development, based on related data on economic finance and social development in Inner Mongolia in the past years, this study has done research on the supporting role the financial development in Inner Mongolia plays on its economic growth. This study discusses the correlations between the finance and economic growth in Inner Mongolia by combining descriptive analysis and empirical analyses. At first the study has briefly reviewed and presented the terms and theories about financial development, economic growth, the relations between financial development and economic growth and rural financial development. And then based on the history of Chinese rural finance, the study has made a further descriptive analysis of the current situation and existing problems of the financial development as well as the economic development in rural areas of Inner Mongolia. And then it makes a further analysis of the relations between the development level of the financial institutions and it economic growth in the rural areas of Inner Mongolia and further applies Granger Causality Test to examine the causal relations between the finance and economic growth in rural areas of Inner Mongolia, which finally proves that there is no bidirectional relationship between the finance and economic growth in the rural areas of Inner Mongolia. The analysis shows that the financial development in the rural areas of Inner Mongolia has made certain progress in recent years and played an active role in promoting its economic growth. However, in a general viewpoint, its speed of development is slow, far behind the growing of the economy in rural areas. It is manifested in that Especially in these years, the regular financial institutions in rural areas has shrunk greatly, a large number of household savings outflows, financial product and service is too simple and the agriculture-supporting function of finance is weakening. These problems are becoming more and more prominent, which illustrates that the finance in the region has not played its due role in the economic development in the rural areas. Significant financial repression exists. Therefore, in recent years, Economic Working Conference of Inner Mongolia Autonomous Region has always emphasized that the foundation to achieving a good and fast economic development of Inner Mongolia Autonomous Region is the agriculture and animal husbandry and the key to the economic development of rural areas is to solve the financial problems.Through the application of relevant theories on economic growth and financial development, based on related data on economic finance and social development in Inner Mongolia in the past years, this study has done research on the supporting role the financial development in Inner Mongolia plays on its economic growth. This study discusses the correlations between the finance and economic growth in Inner Mongolia by combining descriptive analysis and empirical analyses. At first the study has briefly reviewed and presented the terms and theories about financial development, economic growth, the relations between financial development and economic growth and rural financial development. And then based on the history of Chinese rural finance, the study has made a further descriptive analysis of the current situation and existing problems of the financial development as well as the economic development in rural areas of Inner Mongolia. And then it makes a further analysis of the relations between the development level of the financial institutions and it economic growth in the rural areas of Inner Mongolia and further applies Granger Causality Test to examine the causal relations between the finance and economic growth in rural areas of Inner Mongolia, which finally proves that there is no bidirectional relationship between the finance and economic growth in the rural areas of Inner Mongolia. The analysis shows that the financial development in the rural areas of Inner Mongolia has made certain progress in recent years and played an active role in promoting its economic growth. However, in a general viewpoint, its speed of development is slow, far behind the growing of the economy in rural areas. It is manifested in that the economic growth in rural areas has drawn the financial development but the financial development is at a "passive" state, which has not provided powerful support for economic growth. The economic growth in rural areas is the driving force of its financial development and in turn the financial development shall also exert influence on its economic growth. The two aspects must harmonize with each other. However the relatively serious financial repression in the rural areas of Inner Mongolia has greatly restricted and blocked its economic growth. Therefore to accelerate the reform of the financial system and improve the developmental level of finance in rural areas is of vital significance for the economic growth in rural areas of Inner Mongolia. Based on the analysis as well as the actual situation in the rural areas of Inner Mongolia, the last part of this study puts forward some suggestions on policies of financial development promoting economic growth from the aspects of enlarging financial scale, optimizing financial structure and improving financial and ecological environment. |
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