Abstract: By making use of the cross-sectional data of 31 provinces, municipalities and autonomous regions from 2003 to 2012 and selecting the model suitable for the period of 2003-2012 through LM test, this paper makes an analysis of the evolution of the impacts of China’s financial industry development during the decade on the urbanization. The empirical results show that the impact of the financial industry development during the decade on urbanization presents such an evolution trend: not significant - increased - not significant - reduced - increased. As a whole, the financial industry development can play a positive role in promoting urbanization, and in the long term the effect is gradually increasing. However, this effect is easily affected by macroeconomic fluctuations, macro-policy adjustments and other external objective factors to become transitory non-significant. Based on the above analysis, we propose that the financial support should be strengthened from the three aspects of the urban infrastructure construction, the urban industrial development, and the citizenization of the rural migrant population, so as to strengthen the role of the financial sector development in promoting urbanization.

Key words: financial sector development; urbanization; urban industrial development