Study On Urbanization And Financial Development Role Relationship Of China

Urbanization’s development is associated with the development of industrialization and it is the measure of a country’s modernization. Urbanization is a economic phenomenon that effect the whole word, and no country can do without this change. The only difference is which section of the urbanization the country is in. With the time past, China’s urbanization has maintained a good momentum of steady development, and provide a reliable guarantee for China’s economic growth, it is a strong impetus to the development of our country and society. In the next period, impelling the process of China’s urbanization actively and steadily is still an important theme of our comprehensive development. Finance is the core of the modern economy, and it plays a very important role in the process of urbanization.This paper based on the development of urbanization and financial relationship. After reviewing the theory achievement of the urbanization and financial development, then analysing deeply the relation of the urbanization and financial development, in order to understanding the relation of the urbanization and financial development comprehensively and objectively. On this basis, combine with the status of China’s financial development and urbanization, explore the intrinsic relationship between the urbanization and financial development, which not only helps to enrich and improve the theoretical system of Chinese urbanization-depth development, but also has an important theoretical significance to Chinese urbanization..The paper is divided into five parts. The first part is the introduction, including research background and significance, overview of relevant theoretical research, research ideas and methods, the article is organized, innovation and shortcomings; The second part is the analytical framework of urbanization and financial development, including urbanization theoretical analysis, the theoretical analysis of the financial development, the theoretical analysis of the interaction between urbanization and financial development; The third part is the interaction analysis of China’s urbanization and financial development, mainly discusses the process and problems of Chinese population urbanization, economic urbanization and social urbanization, and explore the path of financial development between Chinese population urbanization, economic urbanization and social urbanization. The fourth part is the empirical studies on the relation of urbanization and financial development interaction of China, by choosing indicators and data that measure the level of urbanization and financial development, then use the square root test, cointegration test and Granger causality test to prove the interaction between urbanization and financial development; The fifth part of this study is the conclusion and policy recommendations.Study on the interaction between urbanization and financial development of China, we can know the followings between the urbanization and financial development:(1)There is a link between the financial development and population urbanization of China, and this contact is mostly one way:financial development is the main reason for the urbanization of the population. Financial structure and financial efficiency have more impact to the urbanization of the population then the financial scale.(2)The development of the financial scale and financial efficiency determine the development level of the economic urbanization, but the impact of the financial structure to the economic urbanization is relatively small.(3)The financial scale, financial structure and financial efficiency have a certain impact on the social urbanization, and the financial efficiency is the most important factor. In another word, the financial efficiency has more far-reaching to the social urbanization then the financial scale and financial structure.(4)There is a long-term equilibrium relationship between financial development and urbanization of China, and bidirectional causality exists between the level of financial development and the level of urbanization. Improve or reduce financial development will cause the level of urbanization increased or decreased, the level of urbanization raise or lower will also lead to the raising or lowering of the level of financial development.Chinese urbanization is a huge, daunting and complex systems engineering, therefore, give full play to the interaction between financial development and urbanization, not only has an important role in guiding the process of Chinese urbanization, but also put forward a higher level of requirements to the financial development.