The Impact Of The China's Credit Market Development On The Regional Economic Inequality

Since the reform and opening,China's economy has achieved tremendous results after nearly 40 years of rapid development.However,there are still many problems.The unbalanced regional economic development is one of them.At present,China's requirements for economic development have shifted from high speeds to high quality.Unbalanced regional development is an important manifestation of low development quality.It is particularly important to realize regional coordinated development as a way to promote high-quality development at the regional level.This requires us to have an accurate understanding in the causes of imbalances in regional economic development.Through combing domestic and foreign literature,it can be found that most scholars recognize the view that credit will have an impact on economic development.It is not difficult to imagine that if we focus on the regional level,if credit's impact on the economic development of different regions is different,it will indirectly lead to the imbalance of regional economic development.Credit,as an important component of China's finance,bears the burden of resource allocation and financing for economic development.However,few people associate credit with regional economic differences for discussion.This paper takes regional credit development as its focus,analyzes its relationship with regional economy,and hopes to explain its impact on regional economic differences.This paper uses four kinds of measurement methods to calculate the regional economic differences and regional credit differences between 1978 and 2016 in China respectively.After cointegrating them,it can be found that there is a two-way causal relationship between regional credit differences and regional economic differences.The intensification of imbalances in credit development regions will lead to an increase in regional economic disparities,and the widening regional economic disparities will also increase the imbalance in regional credit development.Subsequently,a panel data model was used to test the impact mechanism and examine the impact of credit size in different regions on economic de-velopment.The results show that there are differences in the direction and influence of the credit development in each region on the regional economy.The expansion of regional credit scale in coastal areas has a strong role in promoting regional economic development,while it does not have a significant effect on local economic development in inland areas.Based on empirical findings,this paper proposes:First,in the process of developing financial markets,it should maintain a modest expansion of credit scale;Second,during the development of the credit market,strengthen the development of areas with relatively low credit levels;Third,In the management of credit markets,to avoid "dogmatism",the "market-oriented mechanism" and "government-led mechanism" should be used flexibly according to regional characteristics.