Social Trust: Informal Finance and Economic Transformations

Preface: It is Urgent to Establish a Modern Financial System Supported by System Trust in the Transformation of Economic and Social Modernization
Acknowledgments
Introduction
Contents
About the Author
List of Figures
List of Tables
Part I Social Trust and Informal Finance
1 Significance of the Sociological Study on Informal Finance
1 Why Do We Study Informal Finance and the Social Problems It Causes?
2 Sociological Significance of Studying Informal Finance
2.1 The Public's Extensive Demand for Financial Management Is the Inevitable Trend of Economic and Social Transformation
2.2 The Informal Finance Is Related to the Modernization Transformation of Regional Economic Society
2.3 The Informal Finance Reflects the Interaction Between the National Financial System and Grassroots Society
3 Origin of Research: Observation, Study, and Thinking on Finance in City D After Returning Home in Recent Years
3.1 City-County Urbanization with Scarce Financial Resources
3.2 The Regional Economy Under the  Dominance of Real Estate Was Not Real but Empty
3.3 Social Stability Problems Caused by the Rupture of Informal Fund-Raising
4 Theoretical Basis: Sociological Discussion on Financial Issues
4.1 Classical Sociologist: Financial Institutions and the Transformation of Modernity from the Rational Perspective
4.2 Modern Economic Sociology: Financial Behavior and Social Network from the Perspective of Embedding
4.3 Multi-Dimensional Research Perspectives and Main Viewpoints on the Phenomenon of Informal Finance
5 New Theoretical Perspectives: Social Trust and Transformation Theory
6 Research Significance
6.1 It Is of Great Practical Significance to the Financial Field
6.2 It Is of Great Theoretical Value to the Field of Sociology
2 Concepts, Methods, Research Findings, and Innovations
1 Core Concepts of This Study: Personal Trust and System Trust
1.1 Traditional Social Trust: Personal Trust
1.2 Trust in Modern Society: System Trust
1.3 The Structural Rupture of Social Trust and Its Reconstruction
1.4 Informal Lending, Informal Debt, and Informal Financial Market
1.5 Culture Gap Is an Important Factor of Social Trust Rupture
2 Place Names and Personal Names in This Study
2.1 City D, District N, County X, and City S
2.2 People and Related Enterprises
3 Research Methods: A Case Study Based on City D
3.1 Case and Representative Analysis
3.2 Data Source
4 Main Findings
4.1 The Foundation of the Development of Informal Finance Is the Traditional Social Trust Network
4.2 The Root Cause of Informal Financial Crisis Is the Rupture of Social Trust
4.3 The Key to Deal with Informal Financial Crisis Is to Rebuild System Trust
5 Research Innovations and Deficiencies
5.1 Innovations of This Study
5.2 Deficiencies of the Research
3 Traditional Social Trust and the Rise of Informal Finance in City D
1 The Scale of Informal Finance in City D
1.1 Overall Evaluation of City D
1.1.1 A Local Survey of City S
2 Important Background of the Rise of Informal Finance in City D
2.1 Large-Scale Promotion of City-County Urbanization and Industrial Transformation
2.2 Unbalanced Allocation of Resources in the Formal Financial System
3 Several Stages of Informal Finance Development in City D
3.1 Capital Gains and Public Participation: The Snowball Effect of Interpersonal Trust Network
3.2 From Acquaintance Society to Stranger World: Trust Construction in the Grey Zone
3.3 From Individual Fund-Raising to Institutional Lending: The Formation of Informal Financial Market in City D
3.4 Summary: Traditional Trust Network Is the Cornerstone of Informal Finance in City D
4 Social Trust Rupture and Informal Financial Crisis in City D
1 The Outbreak Process of Informal Financial Crisis in City D
1.1 Jumping of X1 in T Enterprise: The Fuse of Informal Financial Crisis in City D
1.1.1 Local Industrialists with High Social Reputation and Strong Strength
1.1.2 Business Expansion Driven by the Windfall Profits of Real Estate Windfall Profits
1.1.3 The Dream of Pomegranate With No Loan and the Break of Capital Chain
1.2 Rumor and Misinformation: J Group Suffered a Run by Investors
2 Spreading Rumors and Panic: The Collapse of Social Trust Network
2.1 A Run-On Leading Enterprises: The Collapse of Social Trust in City D
2.2 The Run Storm Spread to Districts and Counties: The Capital Rupture of Business Elites in City S
2.3 Destruction of Social Trust Environment: Informal Enterprises in County X Are Suffering
3 The Government Becomes the Last Reliance: Creditors’ Struggle and Rights Protection
4 The Weapon of the Weak Arouses Social Concern
5 Resorted to the Court, but Faced Enforcement Difficulties
6 With Demonstrations and Petitions, Local Governments Have Become a Lifeline
7 Summary: The Rupture of Social Trust is the Root Cause of the Spread of Informal Financial Crisis in City D
5 Strategies of Different Departments to Cope with Informal Financial Crisis
1 Financial Sector: Tightening Credit and Building Risk Firewall
2 Regulatory Authorities Urged to Crack Down on “Illegal Fundraising”
3 Grassroots Government: Maintaining Stability and Pacifying
3.1 City and County Level: Internal Inventory, Post Deletion, and Interception
3.2 Level 1 Township: Overwhelmed with Appeasement
4 The Judicial System: Willing to Be the creditor’s Grandson
4.1 A Heavily Guarded Creditors’ Meeting
5 Summary of This Chapter: Crisis Response Neglects the Construction of System Trust
6 Efforts to Reshape Regional Finance with Government Credibility
1 It’s Hard to Recover: Regional Economy After the Collapse of Informal Debt
1.1 Difficulties of Informal Enterprises
1.2 Funding for Transformation and Development Is Lacking
1.3 New Urbanization Is a Drop in the Bucket
2 Efforts of State—Funded Guarantee to Reshape Regional Finance: From City Investment to Venture Capital
2.1 Local Debt: Merits and Demerits of Urban Investment Companies
2.2 Reshaping Regional Finance: The Vision of Venture Capital Firms
2.3 Hard to Understand: PPP Suffers Cold Shouder from Private Capital
3 Summary: The Difficulty of Trust Rebuilding and the Root Cause of Government’s Failure to Reshape Regional Finance
7 The Reconstruction of Trust System and the Modernization Transformation of Regional Finance
1 Objectively Judging Informal Finance is the Premise of Correctly Handling Crisis
1.1 The Informal Capital Market is an Important Supplement to the Formal Financial Structure
1.2 Informal Lending Market is an Effective Form of Collecting Social Capital
1.3 Informal Capital Market is the Regional Mode of Sharing Economic Development
2 It is Urgent to Change from Traditional Trust to Systematic Trust in the Transformation of Social Modernization
2.1 Serious Cultural Lag of Traditional Trust
2.2 Structural Rupture in the Process of Trust Transformation
2.3 Reconstruction of Trust and Realization of Modernization Transformation
3 Top Priority: Building a Financial System that Matches the Modern Economy
3.1 To Prevent Systemic Financial Risks, We Must Properly Handle Informal Finance
3.2 To Establish a Modern System of Trust for the Informal Capital Market
3.3 Promote the Rational Connection Between Informal Finance and Formal Finance
Part II National Trust and Economic Transformations
8 Development Finance: Crack the Urbanization Financing Risk with Government Credit Enhancement
1 The Construction of New Urbanization Is Inseparable from the Innovation of Investment and Financing Modes
2 Practice of Innovation in Investment and Financing Mode of Ecological Urbanization Construction
2.1 “Chaohu Governance” Mode—Innovating Financing Subject of the New Urbanization Market
2.2 The “Control and Utilization Plan of Coal Mining Subsidence Area in City Huainan”
3 Innovation of Investment and Financing Mode to Realize the Comprehensive “Ecological, Social, and Economic” Effects
4 Accelerate the Construction of China’s Medium and Long-Term Financing Systems
4.1 The Internal Demand of National Development Strategy for Medium and Long-Term Financing
4.1.1 Development Finance Needs to Accelerate the Construction of Medium and Long-Term Financing Systems
4.1.2 Medium and Long-Term Financing Is the Key Way to Balance the Total Amount of Social Financing
4.2 Challenges and Opportunities in the Construction of Medium—and Long-Term Financing Systems
4.2.1 Learn from Foreign Experiences and Innovate Bond Financing System
4.3 Policy Suggestions
4.4 It Is Urgent to Build Policy-Based Financial Systems and Legislations
4.4.1 The Objective Necessity and Importance of Policy-Based Finance Under the New Situation
4.4.2 China's Policy-Based Financial Reform Should Be Viewed from a Strategic and Long-Term Perspective
4.4.3 Learn from International Successful Experiences and Promote Policy-Based Financial Legislation
4.5 Accelerate the Construction of “Green Finance” System with Chinese Characteristics
4.5.1 The Urgency of Building a “Green Finance” System
4.5.2 The Basic Structure of the “Green Finance” System
4.5.3 Focus on Building a “Green Finance” System
9 Development Finance: A Financing Platform Between the Government and the Market
1 The Characteristics of Development Finance with Chinese Characteristics
1.1 Development Finance Takes a Policy-Oriented Instead of Risk-Oriented Approach to the Selection of Investment Targets
1.2 Development Finance Resolves the Risks of Large Long-Term Loans
1.3 The Credit Support System of Development Finance Helps Ease the Pressure on Fiscal Expenditure
2 “Wuhu Model”: Use Government-Organized Credit Enhancement to Resolve Urbanization Financing Risks
2.1 Local Government-Organized Credit Enhancement Resolves the Risks of Large Long-Term Loans
2.2 “Loan Bundling” Broadens Financing Channels and Eases the Pressure on Fiscal Expenditure
2.3 The “Land + finance” Guarantee Model Strengthens the Credit Support System
3 “Kibing Model”: Development Finance Solves Issues Concerning the Financing of International Production Capacity Cooperation
3.1 Development Finance Resolves Credit Risk in Financing Through the Dual Means of the Government and the Market
3.2 Development Finance Gives Full Play to National Policy Support to Solve the Overseas Tax Problem
3.3 “Syndicated Loans” Provide Medium- and Long-Term Loans for Those Going Out of Private Enterprises
4 Overseas Political Risks of Chinese-Style Development Finance
5 Conclusion
5.1 The Objective Necessity and Importance of Policy-Based Finance in a New Situation
5.2 We Should View the Reform of China's Policy-Based Finance from a Strategic and Long-Term Perspective
10 The Global Financial Change and China’s Monetary Policy in the New Era
1 The Enlightenment of Global Financial Reform and China’s Financial Positioning
2 Challenges for China’s Finance to Achieve Global Strategic Positioning
3 The Reform of International Monetary System and the Strategy of RMB Internationalization
11 China’s Economic Adjustment and Rebalancing: Inspirations, Challenges, and Strategies
1 The Enlightenment of China’s Economic Adjustment and Rebalancing Strategy
2 The Challenges of China’s Economic Adjustment and Rebalancing Strategy
3 The Strategy of China’s Economic Adjustment and Rebalancing
4 Five Fulcrums for China’s Economy to Cope with Current Challenges
4.1 Improve the Fiscal System to Compensate for Slowing Economic Growth and Weakening Export Markets
4.2 Implement the Principle of Competition Neutrality, Break up Monopolies, and Make Private Enterprises Play a Bigger Role
4.3 Actively and Steadily Promote the Urbanization and Improve Its Quality
5 Comprehensively Upgrade the Development Level of Export-Oriented Economy and Improve the Level, Standard, and Efficiency of Opening Up
5.1 To Promote High-Quality Development of the Chinese Economy in the New Era, Scientific and Technological Innovation Is the Primary Driving Force for Development
References
Index