Analysis Of Zhejiang Private Enterprises "Mutual Insurance Crisis" Case

Zhejiang province is located in the southern region of China, and is an importantpart of the "Yangtze River Delta". Since the reform and opening up30years, Zhejiang’seconomy has obtained considerable development, especially in the private economy, theproportion of which accounted for in the provinces of the first. Now, Zhejiang provincehas become one of the most active areas of China’s economy, and the vigorousdevelopment of private economy also created the famous "Zhejiang experience",becoming the template to follow by throughout the country.However, it is right in the private economy’s hot spot, a profound folk loan crisisbroke out in the second half of2011, many business owners “ran away” to evaderepayment of debts because of capital chain rupture of their enterprises, and then led itdifficult to maintain the production and operation of enterprises to continue, finally wentbankrupt. The crisis has continuous conduction and diffusion through a bank loanguarantee chain, forming a "Domino" effect, eventually in2012and sparked a creditcrisis.According to the case of the early2012Zhejiang private enterprise capital chainrupture due to credit mutual relations and triggered a chain reaction, eventually led to thecrisis, the article hopes to explain the harmfulness of mutual insurance crisis brings to theZhejiang local economic and financial development, analyzes the reasons and theconduction mechanism of its formation, and puts forward the corresponding suggestion.