Preventing The Fragility Of My Country's Financial System Will Help Cross The Middle-income Trap

During the past 100 years,only South Korea,Singapore,Japan jumped across the middle income trap.The current economic development level of Chinese promised that our China had the danger of falling into middle-income trap.Different from the previous scholars' research,this paper will use dynamic factor analysis to study the strong financial mechanism across the "middle-income trap" with the financial system.This paper analyses the vulnerability of the financial system to take the empirical study.Using the dynamic factor analysis method,we related it to the financial system with foreign exchange bank,insurance,stock four subsystems to measure the financial fragility between China and Malaysia.The analysis results of period of 15 years combined the index of the actual situation of vulnerability.The results seem to show that the FF is the effect of different degrees of banking,insurance,foreign exchange,stock system.The prevention of financial fragility really can improve the financial system,so as to push forward the middle income trap.The micro level should solve each system obstacles.Thus we should improve our government supervision mode,the restructuring of the financial system and the balance of pluralism and innovation.