A Tentative Estimate Of Private Finance Flow Into Medium & Small-Sized Enterprises

This paper studies the mismatch problem between the large economic contribution of medium & small-sized enterprises and the small capital quantity it raises from the regulated financial market in China. Author uses two methods to estimate the capital quantity of private financial system and how it is channeled into the medium & small-sized enterprises. The results show that China has at least 270 billion RMB, and no more than 340 billion RMB flowing into the medium & small-sized enterprises. This capital greatly contributed to the development of those enterprises. Meanwhile, there is 891 billion RMB circulating outside the regulated financial system, which should be paid attention by the regulators.