Abstract: Based on the typical characteristics of China′s financialization, and domestic and foreign research results of financialization measurements, this paper uses the method of principal component analysis to construct China′s financialization index to measure the trend and cyclical fluctuations of China′s financialization. The results show that the estimated financialization index can better describe and evaluate the trend and volatility of China′s financialization, during the sample period, the financialization of the China′s economy showed a steady upward trend, and volatility;under the trend of economic globalization and financial liberalization, the development trend and cyclical fluctuations of China′s financialization are not only inseparable with the international economic and financial environment and the development of China′s financial market, but also closely linked with the orientation and intensity of China′s macroeconomic regulation and control policies.

Key words: financialization, Principal Component Analysis, financialization index