The Role Of The Financial Development On The Urbanization Of Hebei Province

Urbanization can make resources more concentrated, make the use of resources more efficiently, and it is the only way to modernization, the most important way to solve the problem of agriculture, countryside and farmers, the strongest support to the coordinated development of regions, the inevitable requirement of the overall progress of the whole society. We begin to reform the urbanization system in our country in 1992 officially, by the end of 2014, the urbanization rate of the whole country has reached 54.77%. However, in the process of urbanization, side effects exist universally, for example "quantity over quality", "only attaches great importance to the big cities1" and so on, to deal with the side effects of the traditional urbanization system, the 18th national congress report puts forward the concept of new urbanization, the so-called new urbanization, which required the urbanization must be people-centered, intensive and efficient, improve the quality and structure comprehensively, develop the big and medium cities and small towns cooperatively.Urbanization level and quality is gradually becoming one of the symbols of economic development degree. In all provinces of our country, the GDP per capita of Hebei province is in a hierarchical level, however its rate of urbanization has been far below the national average, has been in the middle and lower reaches of all provinces. The urbanization construction is hardly possible without the financial support, financial development can provide financial support for agriculture industrialization, stimulate the precipitation of the rural population; Financial development can guarantee the funding needs in the process of industry center transferring from the first industry to the second and third industry; financial development can enlarge the source of the urban infrastructure investment funds.Therefore, this article tried to explore whether the financial development is responsible to the low level of urbanization in Hebei province and putted forward the corresponding Suggestions, hoping to help the construction of urbanization in Hebei province.Based on the the analysis of the existing theory about the development and urbanization, the job has been done by this article is mainly about the following aspects:first, the measurement of financial development level in Hebei province. The financial development mainly includes two aspects, the financial development scale and the financial structure. We select three indicators to measure the scale of financial development:the total value of financial assets, the number of financial institutions, financial interrelations ratio. We chose the deposit-loan ratio to measure the financial structure. And we compared these four indicators of Hebei province to another eight provinces of which the per capita GDP are close to Hebei, with the eliminating of the influence of population and GDP. The result shows that the financial development in hebei province is in serious lack.Second, the measurement of urbanization level of hebei province. Urbanization level mainly includes two aspects, population urbanization and economic urbanization; population urbanization also includes two aspects, the quality and the quantity of population urbanization. We chose the proportion of the people live in the town and the city to measure the degree of population urbanization, chose the amount of the infrastructure investment to measure the grade of population urbanization, chose the weight of the first industry to measure the level of economic urbanization.Third, the empirical analysis financial support to the urbanization of hebei province. Based on data from 1990 to 2014, we establish three autoregressive (VAR) model of population urbanization, urban infrastructure investment, the proportion of first industry. The explanatory variables are financial development scale and financial structure. After we establish the three models, we made a series of processing:first, with the unit root test we know all the five indicators are not smooth; Second, we made the cointegration test after we done the first order difference, the result of the cointegration shows the indicators of the three models has one cointegration relationship. Finally, we checked out the causal relationship between variables by using the granger test the causal relationship between variables. At last, we draw the conclusion:financial development has expend the urban infrastructure investment, and also has a strong role on promoting the first industry transfer to the second and third industry, therefore, the development of financial are positive to improve the level of urbanization.Fourth, according to the analysis of the urbanization and financial status and trend of Hebei province, and the empirical result, we give out some suggestions about how to improve the urbanization level of Hebei province.