On March 18, 2012, the State Council officially approved Wenzhou's comprehensive financial reform plan. This plan may become the most eye-catching major breakthrough in my country's economic system reform in recent years.

For this reform to achieve breakthrough progress, it depends on the transformation of government functions.

At this stage, my country's economic growth is largely government-led.

In order to make economic growth subject to its specific development goals, the government must directly control a large part of financial resources, which determines that my country's banking industry at this stage must have the characteristics of a high degree of monopoly.

Connected with this, it is inevitable to adopt policies that discriminate against, exclude, and even ban private finance in certain circumstances.

The existence and development of private finance will inevitably compete with state-owned banks for funding sources and infringe on the vested monopoly interests of state-owned banks, so it is difficult to develop normally.

This is the fundamental reason why Wenzhou has produced millions of private entrepreneurs (manufacturing companies) but has never produced a single private banker.

The outbreak of the private lending crisis in Wenzhou in 2011 was a bad thing, but it can be turned into a good thing, that is, it will help speed up the reform of my country's financial system, make private finance gradually become more transparent, standardized, and institutionalized, and make the private lending crisis disappear from my country's financial field. , so that private enterprises can develop healthily.

1. The root cause of the private lending crisis in Wenzhou The private lending crisis in Wenzhou is fundamentally caused by the profit-seeking nature of capital, or the impulse of capital to pursue profits, as well as the spontaneity, blindness and information asymmetry of capital movement.

Looking at the financial crises at home and abroad, they are all the result of the vicious expansion of the virtual economy.

From 2001 to 2004, the Federal Reserve cut interest rates 13 times in a row, from 6.5% to 1%.

Stimulated by low interest rates, the U.S. real estate market is highly prosperous, and a large amount of money has entered the high-risk, high-yield market of subprime debt.

The existence and development of the U.S. subprime loan market depends on the improvement of the macro economy and the continued rise in housing prices. Borrowers can repay their loans on time and the collateral has a stable income stream.

However, after the second half of 2005, the U.S. economic cycle reversed, with GDP growth in the fourth quarter being only 1.1%.

From 2004 to the end of 2006, the United States raised interest rates 17 times in a row. The increase in benchmark interest rates led to an increase in mortgage interest rates, which increased the repayment pressure on home buyers.

During the same period, the U.S. housing market experienced a downturn, and sales of new homes and existing homes began to decline.

The U.S. real estate market began to decline at the end of 2006, and house prices fell by more than 10% from the third quarter of 2006 to the third quarter of 2007. As a result, on the one hand, the default rate of lenders increased, and on the other hand, the price of mortgaged properties shrank.

Under the double blow, the capital circulation of lending institutions was broken, and chain reactions followed one after another, and the subprime mortgage crisis broke out.

The trigger for the outbreak of the private lending crisis in Wenzhou was also the turning point from loose monetary policy to tight monetary policy.

In the face of the global financial crisis in 2008, my country implemented proactive fiscal policies and loose monetary policies. Excess liquidity drove up the prices of real estate, coal mines and other assets, tempting manufacturing entrepreneurs to switch to real estate and real estate in pursuit of high profits. Industries such as coal mining have strengthened the virtual economy and weakened the real economy.

In the ranking of Wenzhou's top 100 private enterprises in 2010, more than 50% were involved in real estate.

The investment in real estate by private enterprises in Wenzhou has surpassed the "real estate speculation" stage, and real estate has become an indispensable industry for many private enterprises in Wenzhou.

?Selling goods is not as good as selling capital? It has been deeply praised by Wenzhou entrepreneurs.

In Wenzhou's traditional clothing industry, companies with certain brands and reputations are directly involved in real estate.

Including Younger, Shanshan, Peacebird, Annunciation Bird and so on.

Aokang Group, a well-known shoe company in the country, is also a real estate developer known to ordinary people.

However, loose monetary policy is unsustainable.

As the loose monetary policy changes to a moderately tight monetary policy, some private enterprises are forced to borrow money from the government on a large scale in order to fill the "fund hole" caused by expansionary impulse.

At the same time, the government was worried about the real estate bubble and strengthened macro-control of real estate, including "purchase restrictions" and "loan restrictions". As a result, real estate could not be sold and capital turnover was interrupted. It also forced entrepreneurs to resort to large-scale loans to promote private lending.

A sharp rise in interest rates.

When the economic benefits of an enterprise cannot bear the high interest rates, the capital chain will inevitably break.

As a result, the private lending crisis broke out.

It can be seen that the outbreak of the private lending crisis is caused by the inherent profit-seeking nature of capital, that is, the pursuit of high profits, the blindness and spontaneity of capital movement, and the asymmetry of information.

As long as underground finance exists, recurring private lending crises are inevitable.

The cyclical nature of private lending crises and the cyclical nature of macroeconomic operations are complementary to each other.

In April 2011, information about the collapse of private enterprises in Wenzhou was publicly disclosed.

In late September 2011, news that a Wenzhou business owner had "ran away" quickly spread through media reports.

Among them, Hu Fulin, chairman of Zhejiang Xintai Group Company (the largest eyewear company in Wenzhou), and Sun Fucai, chairman of Wenzhou Omi Fluid Equipment Co., Ltd., became the media's focus after their temporary loss of contact was confirmed.

?Hu Fulin’s funds were broken due to ***.