Abstract: The diversity of financial structure not only influences the efficiency of financial sector, but also defines the benefit margins of the expansion of financial scale. Therefore, it has a significant impact on the growth and distribution of household’s property income. By making use of China’s provincial empirical data during 2005-2011, this study finds out that the rising of financial diversity has significantly increased the household’s property income, and decreased the inequality of its distribution between the high income and low income groups. Meanwhile, the financial diversity is also the threshold of financial development which influences the growth and distribution of property income. Only when the financial diversity exceeds a certain threshold value, can the expansion of financial scale significantly promote the growth of household’s property income and the equality of its distribution. The results indicate that the optimation of financial structure is far more important than the expansion of financial scale. Thus, to increase the household’s property income in China and to promote its distribution equality may need to further remove some of the discriminatory access barriers existing in the financial markets, especially those against the non-state-owned finance or informal finance. Then a financial system with diverse institutions will be constructed thereby, and a market environment in which all kinds of financial institutions can enjoy fair competition will be fostered, so as to promote the full competition among the various financial institutions.

Key words: financial development; financial structure; financial diversity; property income