The Research On The Relationship Between The Folk Finance And Economic Development In China

Folk finance in China has a long history, since ancient times, the form of diversity, is to adapt to the economic development of the product. Long term free in the financial supervision system, with the rapid development of the market economy. Early,our country carry out the planned economy, after the reform and opening up gradually from the planned economy to the market economy transition, China has been taking public ownership as the main, the formal financial market funds mainly flow to the state-owned enterprises and listed companies. The high threshold of the formal financial procedures, and some of the high requirements of the private enterprises, small and medium enterprises from the informal financial market is difficult to finance. These enterprises can only raise funds through folk financial market. In addition, with the rapid development of our economy, people live and work in peace, and gradually increase the income. Due to traditional Chinese culture, China's savings rate is very high, resulting in a large number of private accumulation of precipitation funds do not play a role. Capital has a profit driven nature, it is the existence of such supply and demand, to promote the rapid development of folk financial markets. The development of the folk financial market has led to the folk investment, so that the idle capital flows into the real economy, promoting the development of private economy in China, and the prosperity of urban and rural economy.Folk finance in promoting economic development at the same time there are risks. In the more developed private economy in Wenzhou, small and medium-sized enterprises accounted for more than nine, requires a lot of money to expand the scale. The enterprise scale is relatively small, low ability to resist risks, in accordance with the formal financial institutions threshold, they cannot obtain financial support, can only turn to the folk financial market. The huge demand for funds in the folk financial market demand, in order to pursue high returns, some private lending gradually transformed into usury, illegal operation frequent. Eventually led to the outbreak of the crisis by the end of 2011, the enterprise capital chain rupture, the boss "foot", lend money overnight bankrupt, seriously disrupting the order of financial market, causing social instability.Folk financial characteristics, classification, formation reasons of development and growth, the folk finance whether and economic development have certain relationship. In the process of development are what kind of risk, take what kind of strategy aiming at the folk finance in our country. In this paper will analyze them one by one. This paper is divided into six parts: the first chapter is the introduction, mainly the background, purpose and significance of this study, the domestic and foreign research status of folk finance, the research content and method. The second chapter is an overview of private finance, private finance related concepts, such as informal finance, private finance, underground finance, external financial system such as the concept and the difference between them and the folk finance. The second is the classification of folk finance, according to the geographical scope, size, trade specialization degree, whether deposits, trade subject classification. Then is the folk financial characteristic elaboration, folk finance is informal, concealment, diversity, flexibility, risk and professional characteristics gradually. Finally analysis the reasons of the formation and development of folk finance, mainly existed in the theory of financial restraint, financial deepening, information asymmetry, financial development and economic growth, the dual financial system structure, is conducive to deepening our understanding of the folk finance. The third chapter is the analysis of the influence of folk finance to the economic development of our country, folk finance is "double-edged sword" has both positive side and negative side, we should take its essence, goes to its dregs ", and actively guide the folk finance. The fourth chapter mainly through indirect estimation method to calculate the folk financial scale, based on the premise of the two assumptions, data of Beijing area is taken as the standard, that economic and financial correlation coefficient, hypothesis and Beijing National Economic and financial related coefficient, by gross domestic product, the formal financial scale indirect estimation, the scale of informal finance. Then, statistical measurement method of informal finance and economic growth empirical research of the relationship, first through the ADF unit root test of GDP and folk financial data is stable, then the independent first-order difference stationary premise using cointegration test, regression, that economic development and folk finance in the linear equation. Finally, according to the Granger causality test, judge whether there is causal relationship between economic development and private finance. The inspection found that folk finance will promote economic development, development and economic development will also promote folk finance.The chapter five mainly discusses the folk financial development process may encounter risks, expounds the concept of folk financial risks, the folk financial risk has the general characteristics of the financial risk, but also has its own characteristics, the folk financial risk points for the external risks and internal risks. Only know the existence of the folk financial development in the problems and reasons in order to better guide the healthy development of folk finance. The sixth chapter is to put forward some policy suggestions for the development of folk finance. By drawing on the experience of other countries or regions, the better development of folk finance in china. Finally, according to the paper.