Study On The Financial Supports To The Real Economy

In recent years, many countries have got rid of the shadow of wars, and the economicdevelopment has entered into a steady and rapid development. Despite some unavoidablecrises, the overall situation of the world economy is going up. It goes without saying thateconomy is very important to a country. Since the financial crisis, scholars pay much moreattention to research the development of virtual economy and real economy. Only the realeconomy has a development can increase the wealth of the society. The real economysymbolizes the essence of the national economy, and shows if the country is powerful andprosperous. The prosperity of the financial market also shows a result of economicdevelopment. In the last few years, the financial crisis occurred frequently, and economicproblems triggered by the sub-prime crisis are still derived. Many scholars want to find themost suitable way of economic development for our own. However, the current situation istoo complex that the relationship between virtual and real economy is in disorder. The realeconomy is stagnant, while the virtual economy is confusing. The global financial crisiscaused by the U.S. sub-prime crisis not only hurt the U.S. economy, but also spread to UK,Europe and Asia. It has brought a great shock to the world economy including China.Although we are extricating the impact of the crisis, there are still many weaknesses andshortcomings in the development of the market. In this paper, by analyzing the reasons andconduction mechanism of the financial crisis, the author attempts to explain how the crisisaffects our economy and give a warning. Besides, it describes some problems which exist inthe real economy now. In the end, it comes up with a number of suggestions and expectationsabout the direction of the development of the real economy in many aspects, such as therelationship between the virtual economy and the real economy, the supports given fromfinancial institutions to economic entities, and the interest rate liberalization.Before the financial crisis, developed countries rush out to develop virtual economy, thefinancial markets are glutted with credit products, and financial liberalization becomes quitehot. For developing countries, situations are distinct. They have been working hard on thecontrol point of their own economic development and growth. By analyzing the consequencesof the sub-prime crisis on the global economy, this paper makes a note on the internationalinfection mechanism. It illuminates that which part of our economy has influenced by thecrisis, how it is being after several years of development and adjustment; explores therelationship and coordination between the real economy and the virtual economy in theory; makes some solutions and recommendations as follows: how can financial institutions helpthe small and medium-sized enterprises with low profits, how to respond the call of thecountry to support the real economy,how to implement the interest rate liberalization andestablish a deposit insurance system and what correlation between the stock market and thereal economy is.