The Operation Of Private Equity Investment In China's Financial Market Environment Analysis

Chinese private equity market started up later than western countries. Yet there is no multi-layer capital market existing in China while domestic financial market is not mature currently. We find an interesting phenomenon that all the private equity funds run in China are partial to invest in traditional industry such as real estate, manufacturing, mineral and energy. And they are more likely to invest in those companies who are in their mature or expanding stages.In terms of empirical research and case study, the thesis tries to find the internal reasons of the phenomenon that lack of national wide credit system, without integrated equity investment withdrawal mechanism, traditional industry profit is still large due to the nation's early developing stage of industrialization. These are the main factors to the question.Base on the exposure of the intrinsic matter together with some interview result to the problem, the author conclude some recommendations for current Chinese situation such as launching a new SME bourse to adjust the misallocation in Chinese capital market, establishing an entirely social credit system of individuals to reduce the cost of equity investment.Eventually the author tries to drive the Chinese private equity industry to a high and sophisticated level with suggestions to be recommended for reference.