Study Of Private Finance Development And Influencing Factors

Wenzhou is the fastest-growing region with the development of private enterprises, it has large-scale private finance. Over the years, Wenzhou private finance has played a huge role in promoting private economic development, promoting small and medium enterprises, expanding financing channels for society and making up for lack of formal finance. At the same time, private financial development has also brought some negative effects, private financial market risks have often occurred. So people began to realize the rationality and the positive practical significance of the existence of the private finance, call for the legalization of private finance as soon as possible and regulate guidance.This paper studies Wenzhou private finance, mainly reveals private financial contribution to economic development from the process of financial development in Wenzhou, and finds its current problems and difficulties by analyzing the impact of financial factors, then makes relevant suggestions. Purpose of the study is to explore suggestions which promote the regulate development of Wenzhou private finance, so that it can play a greater role in the development of national economy in Wenzhou,.The full text mainly consists of five parts: The first part is an introduction. It describes the research background, rationale, and research ideas and research methods. The second part introduces the profile of Wenzhou private finance, including concept definition of Wenzhou private finance, the formation and development, and a variety of operation forms. The third part explores the function of private finance on promoting economic growth in Wenzhou by theoretical and empirical analysis. so as to arrive for the contribution of private finance to promote economic development. Private finance promotes private investment, then private investment promotes economic development, and economic development further prospers private financial markets in turn. The fourth part analyzes three factors of Wenzhou private finance from monetary policy, private market development, and the attitude of government departments,. The fifth part explores the problems encountered by Wenzhou private finance, and adapts new measures to regulate private financial developmentThe main points of view are:(1) Wenzhou is a typical area which relies on private capital. Private finance promotes the development of private investment, and private investment leads economic development throughout the region. Private Finance and formal finance are coexistence. As an effective complement to the formal finance, private finance plays an irreplaceable important role.(2)Changes in national monetary policy, funding needs, risk level, and the close degree of parties to the transaction of private market are the major factors of Wenzhou private finance. Meanwhile, as the actor and manager, local government actions on the private finance also had a great impact.(3) Wenzhou private finance development faces the transition difficulties, begins to move toward relatively weak. Lacking of protection of the legal status is the biggest problem, so that it can not play the greatest effectiveness in promotion of economic development.The suggestions are:(1) The country should adopt legislation to give legal status of private finance, prevent and resolve potential risks from the system.(2)Steadily push forward the reform process of marketization of interest rates, and continue to deepen financial comprehensive reform in Wenzhou.(3) The Government should broaden investment channels, foster fair competition in the market system, support new investment opportunities, and improve the investment environment.(4) The Government should provide good services to guide the benign and independent development of private finance, avoid too much administrative interference and direct participation.