About The Institutional Constraints On The Development Of Private Equity In China

The private equity is a type of important direct financing and is secondonly to bank loan and IPO. So it has great significance for the continuabledevelopment of Chinese economy. This thesis is aimed at analyzing theinstitutional constraints on the development of PE in China and points outthat the institutional constraints are mainly in the regulatory system, themarket system and the social system. It is focused on the China PEdevelopment status while using the theories from the developed countries forreference and it is carried out from the four PE key flows of ‘financing’,‘investment’,‘supervision’ and ‘quit’. In the work the deductive method isused on the Chinese government’s laws, the induction method is used on theobjective data, the microeconomics theory and the game theory are used toanalyse some problems such as the system risk and the social credibility, and other viewpoint are demonstrated by some cases.This thesis is divided into six sessions. The first chapter summarizes thePE theories from the developed countries. The second chapter clarifies thedefinition of China PE funds and its significance, and also demonstrates thePE status quo from the aspects of the development environment and theinvestment market in China. Based on the second chapter, the third chapteranalyses and summarizes the institutional constraints on the development ofthe China PE on three areas of the regulatory system, the market system andthe social system. The forth chapter studies two contrary cases of PE fundson some problems, such as setting up, governance and tax. For theinstitutional constraints, the fifth chapter makes some suggestion for ourconsideration on four fields including the regulatory system, the law system,the market environment and the funds themselves in China. The last chapteroutlines the whole chapter and looks to the future of the PE in China, at thesame time it also points out the historic limitation of the article due to thegradual development mode of the alternation of balance and unbalance.