Abstract: Based on the panel date of 30 provinces from 1992 to 2012 in China, this paper conducts a measurement of the financial deviation and applies the double threshold regression test. The results verify that a simple positive linear correlation does not exist between China’s regional financial development and the real economic growth; instead, some difference is presented between promotion and inhibition, namely, there is the non-equilibrium. Because non-equilibrium can greatly reduce the effective allocation capability of financial market toward capital through different mechanisms, the up and down excessive deviations of the financial development would both suppress the real economic growth with respect to the entity economy. Thus it can be seen that the effective service of the financial development to the entity economy needs not only the subjective support of financial sectors, but also the objective matching between the financial development and the real economic growth.

Key words: financial development; the real economy; non-equilibrium; double threshold regression