The Research On The Financial Support In Private Economic Development Of Zhejiang

Zhejiang province is located in the southeast coast of China, which is densely populated with extremely limited natural resources. Before China’s reforming and opening up, Zhejiang was very poor and agriculture was her main industry. However,30years of development changed everything, now she has become one of the richest and most powerful economic forces in china. The private capital economic miracle of Zhejiang is based on the value of self-improvement, fortitude, innovativeness and pragmatism. But, with the accelerated process of economic globalization, the malpractice of private economy development patterns in Zhejiang is increasingly highlighted out, and the extensive management depending on extension expansion has been behind the pace of development, so it is inevitable for economy to transform and up grade. However, in the process of transformation, private economy has faced with many difficulties, and the corporate finance problems as the biggest bottleneck restrict private enterprise development. This paper sets out from the exigency realistic subject angle, studying the financial support in Zhejiang private economy, investigating the relationship between the financial development and private economic growth, and summarizing the successful experience from United States, Japan and Taiwan. After, architectures the financial support system for private economy in Zhejiang, with the hope of promoting the transformation and upgrading, and realizing the sustainable development of Zhejiang’s economy.Based on the present economy of Zhejiang, according to the theory about financial development, this paper summarizes the related theory and the similar research domestic and overseas. Then analyzes the relationship between the financial development and private economic growth by means of the Granger causality test based on VECM and the KPSS inspection based on maximum likelihood, and review the development history of them respectively. The conclusions are:there is a long-term equilibrium relationship between them; the financial development is not the main cause of private economy, in another word, the financial support to the private economy is not enough; on the contrary, the development of private economy promotes the financial development to a great extent. Next, takes example of successful experience by United States, Japan and Taiwan, and refines something useful for Zhejiang government. Finally, the paper elaborates the necessity of building a more perfect financial support system, and puts forward some suggestions.The empirical study is helpful to rich the research cases about the relationship between financial development and economic growth. Integrating the scattered views, completing the thoughts integrated, and blending in the characteristics of finance and private economy, this paper architectures the financial support system to help the private capital economy get rid of the financial difficulties.