The Study On Coordination Relationship Between Regional Economic Growth And Financial Development In Hubei Province

In March2004, Premier Wen Jiabao put forward the idea of promoting the rise of the central region for the first time in the report on the work of the government. In Hubei province, as the powerful force in the cities of central region, there is so much focus on its economy growth. In November2003, Hubei province made a great strategic decision,which was to establish wuhan city circle. What's more, Wuhan cities circle was approved as national double-model special zone by the Central Committee in2007. This step states that Hubei province will try the best to encourage and fusion regional economic growth. However, regional economic growth isn't apart from financial support, so based on related economic and financial theory,this paper makes preliminary study on Hubei province regional economic growth and regional financial development and puts forward some countermeasures with practical significance.First of all, the paper combs the relevant domestic and international documents about economic growth and financial development relationship. Foreign scholars study their relationship from theoretical and empirical objective, and most of them consider that financial development has great importance to economic growth and there's certain causality between economic growth and financial development. However, some scholars opposed to this opinion. Domestic scholars mainly made some empirical analysis on our country's economic financial actual situation to study causality or other relationship. The results are all kinds and different because of the different time spans and different research objects. The research objects of domestic scholars mainly centralized in areas, such as East Area, West Area or North Area, and the research in regional economic growth and financial development relationship is few.Second, according to statistics, this paper analyzes the status of economic development and financial development present situation. From the analysis we can see that the relative differences of GDP in Hubei province cities are very large and gross fixed capital formation is also the same. And the analysis states clearly there's imbalance in economic growth of Hubei province cities. With the promotion of Hubei province economy, the financial scale of Hubei province is always increasing, financial structure is always adjusting and the financial market is developing stably. In one word, the overall standards of finance in Hubei province have improved greatly. With the financial diversified development and financial innovation, the implementation of financial deepening improves quickly in Hubei province.The next step, we carry empirical analysis on the harmony between Hubei province regional economic growth and regional financial development. Due to restrictions of data, we can't get all data of all the years and all the cities, so the paper chooses six cities as the study object according to their per GDP performence:Wuhan, Ezhou,Huangshi, Xiaogan,Xianning and Huanggang. We make analysis on the coordination between AGDP and FIR based on the data of the6cities in2004-2007.This decision not only considers the different development level of the cities,but that he6cities are included in Wuhan "8+1"cities circle. For the reason, the results of the paper can give some recommendations and advice to the development of Wuhan "8+1"cities circle. At last, the empirical results show that in the long run, there's some co integration relationship between Hubei province regional economic growth and regional financial development, and in the short run, the causal relationship shows unconspicuous.Finally, we analyze the barriers faced by coordinated relationship between Hubei province regional economic growth and regional finance development. The paper believes the reasons why there's not perfect coordinated relationship are mainly the imperfect financial institution system and blocked monetary policy conveyance and so on. In the end, the paper puts forward some the specific measures and proposals to improve the coordinated relationship between Hubei province regional economic growth and regional finance development, such as improving financial ecological environment, deepening the reform of financial institutions, recruiting industry funds and so on.