Study On Private Finance In The Process Of China's Market-oriented Reform

China's modern private finance is an institution different with state-owned financial institution. It appears spontaneously in China's market-oriented reform. As a new institution, it has advantages and disadvantages: it promotes development of private economy, while it also brings large risks and many problems. In this paper, we bring the private financial institution change into our market-oriented reform process, and make thorough inquiry into this topic from angles of theoretical and empirical analysis.The paper comprises four parts besides introduction and acknowledgement. In Chapter 1, we first introduce some explanations of private finance and some similar concepts, and then stipulate the concept of private finance in this paper. And we also introduce some related theories and form the structure of theoretical analysis. In Chapter2, we study on private finance institutional change in China's market-oriented reform. Private finance is result of cooperated function of economic institutional change, compulsory financial institutional change and public financial institutional change. To solve imbalance of supply and demand in financial market, private finance appears spontaneously as an institutional innovation. During the process of institutional innovation,private economic organization is the major role, and local government also plays important role. In other word, private finance reflects a process of triangular game. According to different economic and institutional environment, there're many forms of private finance. Which one to select is up to Institution innovator after making cost-benefit analysis. In Chapters, we analyze factors that hinder private finance development. Because of high risks and big shock to economy brought by private finance, our central government has suppressed private finance, which results in lag of institution building and private finance being restricted. In order to promote private finance development, we should find correct position of private finance in whole financial system,solve relations between efficiency and risk, between development and supervision, and change the function of government. In addition, private finance itself should improve property right institution and establish modern corporate governance.