Research On China 's Internet Financial Development

As a combination of the Internet information technology and finance, Internet finance has a strong vitality since it was born.And it maks a most spectacular development in our country.2013 known as the first year of Internet finance, in this year Yu’ebao reached the scale of hundreds of billions within a few months, P2 P network lending platform also made a explosive development,China has now become the world’s largest P2 P network credit market. Compared with the development of the Internet finance in western developed countries,there is a big difference in scale and speed in our country. Internet finance in our country made a faster development than abroad and gradually formed a independent industry. Even in American which has the most advanced and popular Internet technology,Internet finance doesn’t have a rapid development situation.Then is the particularity of Internet finance’s development in China accidental or inevitable?Finance is the core of modern economy development, that the financial system can configure financial resources effectively is an important performance that the financial system plays a role.Since reform and opening-up, China’s financial system reform has made great achievement, financial scale, financial deepening degree enhances unceasingly. But we have to notice that the problem of insufficient financial inclusion in our country is very serious, a lot of financial demand is difficult to get satisfaction, such as small micro enterprise financing demand, rural financial demand and financial needs of the low-income groups. In this paper, we study the Internet finance from the perspective of improving financial inclusion,and points out that the insufficient financial inclusion of financial system in our country is a important reason which makes a rapid development in China’s Internet finance.The insufficiency of our country’s financial inclusion left a huge space for the development of Internet finance.On the other hand,developing Internet finance is also an inevitable choice to promote China’s financial inclusion.In this paper,we discusses the interaction and relationship between Internet finance and financial inclusion, and study Internet finance from the breakthrough point of improving financial inclusiveness.This paper redefines Internet finance on the basis of summing up the viewpoint of the others about Internet finance in the introduction part.This paper divides Internet finance into general Internet finance and special Internet finance,and points out that special Internet finance is the focus of the study in this paper.China’s Internet finance gets a bigger scale and a greater influence than other countries abroad.This paper takes America for example in the second chapter,analyzes the current situation of Internet finance at home and abroad,and gives a detailed analysis about the speciality of the Internet finance’s development in our country. According to Patrick’s theory, we can analyze financial development from two dimensions of “demand” and “supply”.The economic growth in our country produces a large amount of financial demand.But these financial demands can not be satisfied by China’s formal financial market due to various reasons,especially the demands of “edge customers”,including small micro enterprise financial demand,low-income groups’(even the general public) financial demand and financial demands of rural people. The third chapter of this paper probes into the reasons of the rapid development of the Internet financial from the perspective of financial inclusion.In the premise of comparision about financial inclusion level at home and abroad,this paper points out that the insufficiency of our country’s formal financial inclusion left a huge space for the development of Internet finance,which promoted the rapid development of China’s Internet finance.The fourth chapter of this paper analyzes the formation mechanism about the insufficiency of financial inclusion.First,this chapter analyzes the influence of various factors on the financial inclusion from three aspects respectively including demand factors,supply factors and social environment factors.Then with reference to experience of Thorsten Beck and Augusto de la Torre(2006)’s analysis method about access to finance,this chapter analyzes different situation of financial service boundaries’ change when financial demand and financial supply reach a balance under the condition of asymmetric information.This points out the influence of various factors on financial inclusion more clearly.The fifth chapter mainly analyzes the necessity of the development of Internet finance in China.First,this chapter respectively analyzes the influences of Internet finance on demand factors,supuly factors and social environment factors which cause the insufficiency of financial inclusion. About demand factors,Internet finance relieves the dilemma that “edge customers” lack credit information and collateral,this is conducive to improve financial inclusion.About supply factors,Internet finance reduces all kinds of cost from Financial suppliers,this is conducive to improve financial inclusion.About social environment factors, Internet finance is conducive to promote our country’s interest rate marketization to some extent, helps to break the monopoly and promote the improvement of the credit system, all of these will help to improve our country’s financial inclusion.In the fourth quarter of this chapter,combining with the analysis of Internet finance’s operation mechanism,points out that the development of the Internet finance is an inevitable choice to improve China’s financial inclusion.The six chapter puts forward the corresponding countermeasures and suggestions on how to develop China’s Internet finance in order to improve the financial inclusion on the basis of developed countries’ experience.Recommendations include: build an multiple Internet financial innovation system; build an Internet financial legal system; build an multi-level Internet financial regulatory system; build an Internet financial credit system.