Financial Development In Ordos Folk

With the steady advancing of China’s industrial modernization, energy consumption also increases accordingly. In particularly since2005, the price of domestic coals rises rapidly, which creates an unprecedented opportunity for Erdos to realize leap development by relying on its advantages of natural resource. Under the situation of fluctuation of economic development tides, private wealth continues accumulating, and a great number of small and medium-sized enterprises are rising rapidly. It must be admitted that Erdos’s economy starts late, which causes various problems such as single industrial structure and backward financial services, etc.; therefore, it’s inevitable to have the situations of over narrow investment channel of private capital and that small and medium-sized enterprises are difficult to get formal financial credit support. In view of the natural attribute that capital pursues profit, the private lending in Erdos tends to white-hot situation, and the city also has entered into the era of "all are lending instead of investing in stocks". Large-scale private capital directly or indirectly invested in coal and real estate industries further promotes the continuous industrial expansion of these capital chains. As a result, the excessively expanded real estate industry becomes bubbles in an instant, which becomes the direct cause of capital chain rupture in private lending. In the autumn of2011, major private lending cases such as "Su Yenv Case" and "Wang Fujin Case", etc. broke out. The crisis of private lending in Erdos occurred eventually, and a series of chain reactions were caused accordingly.As a helpful supplement to the economy of formal financial support entities, the existence and development of private lending have their reasons. However, China has always neglected the supervision on private lending, which causes the fact tha tprivate lending is always in natural development status with many unreasonablefactors, in particularly the high credit risks concomitant with usuries. If the private financial market develops freely, its unfavorable factors will inevitably threaten the nation’s social, economic and financial stability.This paper combines the research on private lending in terms of financial theory with the naturally regional characteristics of Erdos; it deliberates and analyzes the formation, development and crisis of the private lending in Erdos, and systematically summarizes the reasons for the private lending crisis in Erdos through research, and finally proposes some normalized suggestions for the development of private lending in Erdos.