Abstract:  Based on the time series data of China from year 2004 to 2015, the nonlinear relationship between financial inclusion and economic development is discussed by using factor analysis, VAR model, and Diks-Panchenko nonlinear Granger causality test The results show that, regardless of linearity or non-linearity, financial inclusion is not effective in supporting economic development From a linear point of view, economic development cannot effectively promote financial inclusion From a nonlinear point of view, the level of economic development affects the level of financial inclusion unilaterally and non-linearly The nonlinear form is presented as a ′J′ curve with an elasticity coefficient of 1673

Key words: financial inclusion, economic development, non-linear correlation, elasticity coefficient