A Research On Structure Problems Of Financing Guarantee Industry In China

Since the government removed the restriction that only non‐private capital can be invested in the industry, a big amount of private capital entered the industry and many private financing guarantee companies arose. These private capital drove the whole industry but also deviated the structure of the industry from the established policy target. The risk‐return character and the structure problem of the industry caused the illegal operation happened frequently. A typical case is “Huading Event” happened in 2012 in Guangdong Province, which caused by the capital chain break because of the illegal operation by the company involved. “Huading Event” revealed some endogenous defects in Financing Guarantee Industry and some structuring problems and supervision defects that may threat the development of the industry.Based on this, this paper chose this typical “Huading event” as a case, deeply analyzed the process of the event, the illegal operation the company conducted, the reason why the events should happen and the influence of this serious event, furthermore, this paper analyzed the industry structures by analyzing the industry of whole country and Guangdong province. to develop the industry healthily and sustainably, this paper suggest that the government should re‐adjust the structure of the industry, improve the supervision mechanism, legal environment and market environment.