The Structure of Supporting Agriculture in Finance and the Income Gap between Urban and Rural Residents- Based on the Perspective of Balancing Urban and Rural Development

We analyze the relationship between the structure of supporting agriculture in finance and the income gap between urban and rural residents in China from 1978 to 2006, and draw the following conclusions: First, the expenditure of relieving farmers, the expenditure of agricultural basic infrastructure and the expenditure of agricultural science and technology can reduce the income gap between urban and rural residents in the long run. Second, the expenditure of agricultural science and technology and the expenditure of relieving farmers can reduce the income gap between urban and rural residents in short term. Third, the income gap between urban and rural residents exists strong inertia, which suggests we must pay great attention to it, avoiding its deterioration. Our conclusions are helpful for scientific and rational allocation of the limited financial resources under the new rural construction