The Influence Of Marketization And Openness On The Income Gap Between Urban And Rural Areas

As China enters a new era of socialism,economic development is facing the problem of inadequate balance.Among them,the expansion of the income gap between urban and rural areas is an important manifestation of inadequate development imbalance.After the reform and opening up,western market economic theory entered China.Market-oriented reform has become the main reform direction of China’s economy.A major mechanism of the economy is the price mechanism.Gradually opening up to the outside world and integrating into the world economic system is also called the main strategy for China’ s economic development.There is a close relationship between the marketization of the price mechanism,opening up to the outside world,and the urban-rural income gap.Based on the theoretical basis of the market price mechanism,this paper firstly establishes a mathematical model for urban and rural residents’ income.By analyzing the effects of marketization and opening degree on the income of urban and rural residents,this paper analyzes the impact of the increase of marketization and openness on the gap between rural and urban incomes.It derives the different effects of marketization and opening up on the income of urban residents and farm residents through "market price mechanism theory" and "factor price equalization theory".On this basis,this paper further analyzes the various mechanisms of marketization and opening up to expand the urban-rural income gap.In order to test the correctness of the theory,this paper uses panel data of 30 provinces and cities in China from 2000 to 2014 to conduct empirical tests.The test results further support the theoretical analysis results.Starting from the results of theoretical and empirical analysis,this paper suggests as follows.First,a rural inclusive financial system should be set up to increase the capital investment in rural production activities.Second,the fiscal expenditure on agriculture should be increased to promote the improvement of agricultural productivity.It is necessary to break the barriers to the household registration system,to provide basic guarantees for the rural laborers who are going to work in cities,and to realize further urbanization.Finally,we should increase investment in educational resources in rural areas,increase rural human capital,promote rural economic development,and improve rural areas residence income.