Study On The Impacts Of Private Financing To Hexian Economic Development

Private financing and county’s economic development are mutually promoted in general sense. The private financing has a role in promoting the development of the county’s economy, and the county’s economic development can drive the activity of the private financing in turn.Presently, Hexian economy has been developing rapidly, with the characteristics of modernization of agriculture, industrial clusters, and increasing internal and external demand. Financial demand, especially the demand for funds, continues increasing, which is mainly reflected in the requirements of the agricultural industrialization, the new-type industrialization and the consumers to funds. However, Hexian formal financial institutions are still imperfect in supporting the country’s economic development, mainly reflected as follows:uneven layout of its service networks, less credit volumes, non-diversified financial institution system, and simple structure. The weak support of the formal financial institutions results from many reasons, such as the county imperfect credit environment constructions and received credit rights.Hexian economic development not only needs the support of formal financial institutions, but also private financing. The positive impacts of private financing to the county’s economic development are mainly reflected in the following aspects: it eases the funds shortage of the agriculture, the rural areas and the farmers, contributes to the development of SMEs and private economy, increases employment and farmers’ income, and forces the formal financial institutions to improve business capacities. However, the private financing also has negative impacts in the Hexian economic development. It interferes with the county’s economic policies implementation, brings about instability of social development, and reduces fiscal income.Private financing has both positive and negative impacts upon the country’s economic development. Since the private financing is accompanied by the economic development and long-standing, it can not be completely eradicated; in order to make better use of the private financing to support the economic development, it is necessary to guide and regulate it in reasonable ways. Based on that and in the national macro level, firstly, the laws and regulations should be optimized to make private financing abide, and clarify the forms, purpose and scale of the private financing; secondly, regulatory authorities should correctly guide and reasonably supervise the private financing activities, making it develop in sunlight; thirdly, the interest rates’market-oriented development should be accelerated to promote the rational allocation of economic resources; fourthly, the credit environment constructions should be strengthened, so as to improve the enterprises’ credit ratings and make each person’s credit condition acquired as possible; fifthly, residents’ consciousness of private financing risks should be improved through advocacy activities, so as to make residents invest rationally and make the resources allocated rationally. On the hand of Hexian’s practical situation, firstly the monitoring and analysis of the private financing should be strengthened, and make the local private financing scale, directions, interest rates and other aspects better mastered according to monitoring index, so as to provide reference to the control of the development of the local private financing; secondly, the private financing registration system should be established to make it move towards the sunlight; lastly, the private fund’s investment channels should be extended, let it flow to the fund-demanded areas.