Research Of How Private Equity Capital Promote China’s Agricultural Industrialization Development

Private equity has become the third mainly financing channel after IPO and indirect inter-bank investment in America and other developed countries. With the opportunity offered by the rapid increasing and structural upgrading of Chinese economic, PE had a great development. Both theory and the practice show that to the enterprise investors, PE is a good way to filter, verify, actively manage company and influence market. Thus PE can accelerate the company development and rise its value. In recent years, the speed of Chinese agricultural development is slowing down, facing the problems like "minor production and big market" and low efficiency. In this case, agricultural industrialization, as a new organization mode offers a chance to improve agricultural production efficiency, prolong the industrial link of agriculture and increase the added value of agricultural production. Thus it can be a good solution. However, due to the low technology, dated management and insufficient investment, the Chinese agricultural industrialization is still limited in its initial stage. As a combination of financial and industrial innovation, PE offers a efficient way to solve the above dilemma by massive investment, enhancing technique innovation and build Modern management system.But now PE contribute a very small promote in capital market, and couldn’t attract enough capitals. So, PE didn’t play the role it should be.With the in-depth analysis based on overall reading and practice about PE, I found3facts restrict the PE development in its initial stage. They are the undeveloped PE system, vulnerable agriculture industry and Imperfect developed market. So here I rise4suggestions, countries need to establish the agricultural industry venture capital fund and agricultural venture investment risk compensation fund, the private equity capital investment in agricultural enterprises to give the preferential policy, perfecting capital market, help the private equity capital exit, reduce the investment risk...