China’s New-type Urbanization can’t be realized without financial supportApr. 8,2016
China’s economy has maintained rapid development, at the same time, the gap between urban and rural areas has widened. In order to tackle the issue, the Eighteenth National Congress of the Communist Party of China and the Central Economic Working Conference clearly proposed a new pattern of urbanization. However, the process of new-type urbanization needs a large amount of money that cannot be supported solely by government finance. Hence the lack of financial support seriously constrains China’s urbanization.
Based on both domestic and international research findings, the author of this study, XIONG Xianghui, Lecturer of Shanxi Banking School and PhD. student from School of Economics and Management of Northwest University sets a comprehensive evaluation system measuring the level of new-type urbanization, obtains the individual urbanization rate of each region, constructs a model to analyze the impacts of financial supports and finally gives solutions and recommendations regarding the developmental situation of China’s urbanization. This study is supported by Major Project of Key Research Institute for Humanities and Social Sciences of the Ministry of Education of the People’s Republic of China (11JJD790022) and Western Project of National Social Sciences Foundation of China (12XRK007).
This study adopts the comprehensive evaluation system of 7 indicators for the new-type urbanization and the spatial econometric method to analyze the level of the new-type urbanization in 31 provinces in China from 2004 to 2013. The results show that the level of China’s new-type urbanization gradually increases year by year, but the gap in the level of the new-type urbanization among the eastern, central and western regions are gradually widening. Meanwhile, the provincial levels of the new-type urbanization in China show the feature of spatial concentration as well, and such concentration has been more and more significant in the recent 10 years.
Next, through the panel data models, this study sets indicators from 3 perspectives, namely financial scale, financial efficiency and financial structure, to measure the effects of financial factors on the development of new-type urbanization in 31 provinces of China during 2004 to 2013. The regression results objectively show the spatial dependence of financial support and the provincial level of the new-type urbanization, and such spatial dependence exhibits clear regional differences. Improvement in the level of financial support has positive influence on the urbanization of the eastern, central and western regions of China, but the degree of the influence varies.
In the future, financial support shall not only aim to improve the overall level of China’s new-type urbanization, but also aim to enhance the imbalanced development of the new-type urbanization among China’s eastern, central and western regions. The empirical research results of this article put forward the following suggestions. Firstly, financial institutions shall increase infrastructure construction investment during urbanization. Secondly, financial efficiency and support for rural-urban industrial integration shall be increased as well as the industrial development of the new-type cities and towns shall be promoted. Thirdly, financial structure and services shall be improved while sustainable development of the new-type urbanization shall be realized.
The research findings are published in the 6th issue of The Journal of Quantitative & Technical Economics, 2015. The bilingual version has been launched already.