It has been noted that a special relationship between China's economic growth and its opening to the outside world is that China has attracted a large amount of foreign investment, mainly foreign direct investment, which has made China quickly become the world's factory. If the purpose of foreign investment is to take advantage of China's cheap labor, it can also be achieved through export orders. So, someone raised such a question: "Why does China need so much foreign capital?" Today, the old story comes up again, but the question is, "Why does China need private capital? What has private finance brought to China? " Compared with state-owned financial institutions, the comparative advantages of "underground banks" lie in two points. First of all, it has the enthusiasm to collect customer information. The state-owned financial institutions' loans to support the private economy are compulsory, and their enthusiasm can be imagined. Moreover, the information of SMEs is relatively scattered, the risk is not easy to control, and the amount of a single loan is small. If you lend money to a large enterprise, the amount of a transaction may not be reached by several small and medium-sized enterprises combined. Who do you think state-owned banks are more willing to lend to? "Underground money houses" rely on customers to eat, so they should have the motivation to actively find customers. Second, the cost of searching information is relatively low. Because of its illegality, underground money houses can not be expanded on a large scale, but only reduce the cost of obtaining customer information. Because of the small trading radius, their understanding of customers can be specific to where customers live, how many people there are and what hobbies they have. Zhang Jun, a researcher at the Institute of Rural Development of China Academy of Social Sciences, said: "The sphere of influence of Wenzhou underground money houses is generally within 2 kilometers, so you are familiar with the situation of people who come to borrow money and can control risks." In contrast, state-owned banks have a large market radius and a wide range of transactions. If you want to find out the information of each customer, the cost is naturally higher.

Finance has two functions. From a macro perspective, we should turn savings into investment, so that money will not be lost from circulation. Financial institutions are the wings of money. Microscopically, the function of finance is to allocate resources, including capital goods and consumer goods. This process is realized by financial institutions choosing loan objects. For the allocation of capital goods, efficiency depends on whether financial institutions can choose good projects. The growth and development of non-governmental finance has made a significant contribution to the development of China market.