Empirical Research On The Influence Of Guangxi Rural Financial Development On Farmers’ Income Growth

China is a traditional agricultural country with nearly 50 percent of rural residents. However, the contribution of the first industry to the whole economy is only about 5%. The "three rural issues" have become the focus to the party and the state and the problem urgent and necessary to be solved. The solution of the "three rural issues" problem, to what extent and with what result, are directly related to the agricultural development in our country. At the same time, it also has a profound impact on the economic development in the new normal and on the social stability of the country. Since 1978, the policy of reform and opening up has been implemented for 36 years, and China’s economy, with its remarkable achievements, has become the second largest in the world. However, the improper economic structure,the increasing development gap between urban and rural areas, especially the low-income farmers, are the important factors affecting China’s economic and social development as well as its social stability.Located in China’s western remote mountainous areas, Guangxi is a major agricultural province with more than 80% agricultural population of its whole. The first industry in Guangxi accounts for more than 20% of the total economy, which is nearly four times of the national average level. At present, in the new normal background, Guangxi’s economy is in the transition phase from rapid growth to medium-high-speed growth. It is a major issue facing Guangxi Government as how to deepen the reform, to consolidate the foundation of agricultural development, to promote the rapid growth of its farmers’ income, to speed up the economic and social development, and to achieve the "two built targets". A series of measures of reform and strategic adjustment have brought forth great economic achievements in Guangxi. Especially, the China-ASEAN Expo settling down in Nanning as its permanent site is the icing on the cake to the economic development in the province. However, as the economic development demands higher level financial services, the defects of the rural finance in Guangxi become more and more prominent and it is more and more difficult to meet the needs of rural economic development. The financial system of overall weak function can not meet the needs of economic development, and will hinder the rural development and the increase of the farmer’s income. That is the important factor leading to the slow growth of farmers’ income and enlarging the income gap between urban and rural residents.This paper employs the econometric method to evaluate and test the reality of the farmers’ income and rural financial development in Guangxi, and studies the impact of rural financial development on Guangxi farmers’ income growth from four aspects: the scale of rural financial development, its economic efficiency, the proportion of the rural labor force and the investment in rural areas. The results based on Granger causality test, the unit root test and the co-integration test show that Guangxi rural financial development has a long-term co-integration association with the farmer income growth, and the Granger reason of the farmers’ income increase is the efficiency of rural financial development and scale of economic development. Further research, by using impulse response analysis, on the four indexes of Guangxi rural financial development and on the per capita income of farmers show that Guangxi financial development efficiency significantly promotes the increase of farmers’ income, while the effect of its structure and scale is not so obvious. This paper finally emphasizes that only by extruding the leading role of the rural orthonormal finance, developing and perfecting the rural informal finance, and improving financial market efficiency through competition mechanism can the rural financial development serve better to promote the farmers’ income in Guangxi.