Research On The Impact Of Inclusive Financial Development On The Income Gap Between Urban And Rural Areas In China

The concept of inclusive financial development was formally proposed in the third Plenary Session of the 18 th CPC Central Committee.The purpose is to alleviate the current situation of unbalanced allocation of financial resources in China,promote the flow of resources to backward areas,and allow the low income disadvantaged groups to enjoy the same financial service,and eventually reduce the income gap between urban and rural areas.However,the gap between the rich and poor in urban and rural areas has always existed in our country.Therefore,combining the actual situation of our country,the relationship between the financial development and the income gap between the urban and rural areas will be helpful to understand the present situation of the general financial development in China,and to put forward some countermeasures and suggestions to alleviate the gap between the rich and poor.In this paper,referring to current domestic and overseas research on various index systems proposed by Inclusive Finance,combined with China's financial development,I draw on Sarma's inclusive financial index system.I selected ten indicators for the use of financial services,quality of service,availability of financial services,and introduced two indicators to support the development of three rural and small loan companies innovatively.Through the comparative analysis of the inclusive financial development index of 31 provinces in 2005-2016 years,we find that the development level of Inclusive Finance has been continuously improving throughout the country,but there is a large gap between various regions.In theory,through reducing the threshold effect of financial services,eliminating the exclusion effect,reducing the direct mechanism of the poverty effect and the indirect effect mechanism of economic growth,the financial development of Inclusive Finance reduces the gap between the rich and the poor in urban and rural areas.In the empirical part,the panel data of 31 provinces in 2005-2016 years were constructed for regression analysis.The results show that due to the strong support of China's macro policy,the current national inclusive financial development has significantly reduced the income gap between urban and rural areas.Through the empirical results of various regions,it can be seen that the income gap between urban and rural areas is narrowed significantly in the eastern,central and western regions of China,and the role of the western region is greater than that in the eastern and central regions.It can be seen that the Pratt and Whitney financial mechanism in China has achieved better results in the western region.At present,the financial width of the eastern part of China has developed to a high level.The financial reform should be further promoted from the development of the financial depth and the improvement of the financial service quality.