Correlation Analysis of the Rural Finance Development and Rural Economic Growth - A Case of Sichuan Province, China

Based on relevant research on rural finance development and rural economic growth by some Chinese scholars, taking Sichuan Province of China as an example, index of rural financial scale (deposit scale Y1 and credit scale Y2), index of rural financial support to agriculture (agricultural loan scale Y3, loan size of township enterprises Y4), index of rural economic development level (total output value of agriculture, forestry, animal husbandry and fishery X1, added value of township enterprises X2, growth rate of per capita net income X3) are established according to the 2000-2007 Sichuan Statistical Yearbook. Meanwhile, Gray Relational Analysis Method is used to analyze the correlation degree of rural financial development and rural economic growth. Result shows that rural financial development has relatively great impact on the agriculture, forestry, animal husbandry, fishery and township enterprise, especially on the output value of traditional agriculture. Agricultural loan has relatively high correlation degree with rural economic growth and has made extreme great contribution to the output value of traditional agriculture. Moreover, agricultural development has become the direct reason for the net income growth of farmers. Correlation degree between loan scale of township enterprises and net income of peasants is the worst. Finally, the entire contents of rural finance and rural economic development can not be fully reflected due to the subjectivity of index selection and the neglection of many large scale informal financial institutions in rural areas. Thus, countermeasures for optimizing the investment structure, opening up rural financial market and improving rural folk financial system are put forward.

Issue Date:
Oct 20 2009
Publication Type:
Journal Article
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Asian Agricultural Research, 01, 10
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