The Role Of The Chinese Government In The Development Of Private Equity Fund

The global financial crisis in 2008 triggered a public reflection and review. Re-examining the government's role in the economic and social development is an important trend at the moment. In this paper, we mainly analyze the the role of government in the process of private equity funds development. Throughout the world, governments play a very important role in the development of private equity funds.In this paper, we start from analyzing the market failure during the private equity funds in support of high-tech industry,we discuss the necessity of government intervention in private equity funds,using DGLLS's view of ability of social cooperation.Then, review the role of government during various stages of the private equity funds development and propose the problems in the development of private equity, analyze some deep-seated reasons; then analyzed the role of government in the development of private equity funds in United States,South Korea,Israel,and Germany. After learnning from the role government play in private equity funds around the world then propose the advice what our government should do in the development of private equity funds,including improving the legal environment, strengthening the financial and tax support and improving the private equity funds'exit mechanism like the GEM and new three board.This paper argues that our government should be actively involved early in the process of private equity funds development, and play an effective role in guiding and monitoring, and in the mature stage of private equity funds development, the government's role should be timely transformed from participant into rule-maker, eventually play a role of regulator.