Study On Investment And Fianacing Mechanism Of Circular Economy In China

The rapid development of China's economy is at the cost of excessive consumption of natural resources. The development of Circular Economy has strategic significance in resolving environment restriction and natural resource bottleneck which limit economic development, accelerating the building of resources-saving society and promoting the sustainable development of national economy. Circular Economy has been the main field of national investment. But there are still many problems with the investment and financing of Circular Economy, for example, single investment channel, inverse investment main body, lack power for enterprises'investment, the low ratio of direct financing, and lack of financial innovation in Circular Economy. Therefore, it is of great practical significance to do the study on how to establish plural investment and financing mechanism of Circular Economy.Based on the theory of public goods, externality of environment and sustainable development, this thesis tries to find methods to solve problems in the investment and financing mechanism of Circular Economy through positive analysis and put forward suggestions on setting up reasonable investment and financing mechanism.Upon reviewing the theory of public goods and externality of environment, this thesis points out the relationship between the development of Circular Economy and finance as well as the particularity of Circular Economy and its investment and financing with the theory of sustainable development. Based on the empirical study on the investment and financing mode of Circular Economy in developed countries and the analysis of investment and financing situation of Chinese building materials industry, this thesis puts forward the diversification and socialization of investment and financing of Circular Economy according to China's current situation. In view of this, the former single investment channel should be transferred into diversification to solve its fund shortage through changing the situation from government as the investment subject to diversified investment subjects by opening market to enterprises, individuals, financial institutions and investment companies. This thesis discusses the applicable investment and financing methods for Circular Economy in China and proposes some new measures beneficial to its development. Financial innovation is the key point to solve the bottleneck to Circular Economy investment and financing. In the market economy, enterprises should be the main body of Circular Economy as well as its investment and financing subject, however, the development of Circular Economy in China still depends greatly on the government's investment, which is not in line with the requirement of market economy. Therefore, in order to create favorable environment for the development of Circular Economy, the government should position itself clearly, establish relevant policies to promote the investment and financing of Circular Economy and improve the law system.