The Study On The Influence Of Urban-Rural Finance Disequilibrium On Urban-Rural Income Inequality In GanSu Province

Since China’s reform and opening up, along with the rapid growth of our country’s economy, urban and rural residents income gap presents the further expanding trend, and the gap between rich and poor has seriously restricted the change of economic development mode in our country, this inequity has been affecting the social fairness, justice, harmony and stability.With the development of modern economy, finance has increasingly important position in the economy, financial resources gradually become one of the key constraints for a country or a region’s economic growth.Long-term financial disequilibrium between urban and rural areas becomes one of the main reasons of urban-rural dual economic structure is sustained, and urban-rural income gap is widening.Urban-rural income gap in GanSu province is much higher than the national average level,and the financial development has obvious tendency of urban and rural duality, therefore, we choose GanSu province as the research object, this paper discuss the influence of urban-rural finance disequilibrium on urban-rural income inequality respectively from finance scale and finance efficiency in GanSu province, in order to provide a reference for narrowing the urban-rural income gap from a financial perspective,and improving urban-rural dual economic structure in GanSu province.Firstly, based on the review of the related literature about financial development,urban-rural income gap, and balanced development between urban and rural areas, etc, the author makes some statistical analysis on the income gap and finance unbalanced development situation between urban and rural areas in GanSu province since the reform and opening up.Then the author found that urban-rural income gap in GanSu province has been gradually expanded, and the unfairness of urban and rural residents income distribution is more serious then national average level.Financial development in rural areas lags financial development in urban areas in GanSu province, presenting the apparent "duality".Secondly, this paper introduces Douglas production function and analyzes how urban-rural finance unbalanced development to make financial resource distribution between urban and rural areas through bank, security, insurance and other industries under the condition of GanSu province, affecting urban-rural economic imbalance development, eventually expanding the urban-rural income gap.Thirdly,the author selects relevant data of GanSu province in1978-2009,and analyzes empirically the the influence of urban-rural finance disequilibrium on urban-rural income inequality.The results show that the urban-rural economic disequilibrium is the main cause of the urban-rural income gap, the second is the scale of urban-rural financial disequilibrium, and the influence of urban-rural financial efficiency disequilibrium on urban-rural income gap between is weak.Finally, on the basis of the above analysis, the paper gives some suggestions from two aspects of supply and demand. By deepening the reform of rural financial system, perfecting the rural financial system to promote the finance coordinated development between urban and rural areas in GanSu province,and finally to narrow the urban-rural income of gap, to improve the dual economic structure.