The Research Into Financial Structure And Financial Reformation Of Foreign Investment Enterprises In China

With the establishment of market economy system in China and the deepness of reformation of state-owned enterprises, the financing behavior of state-owned enterprises is becoming the focus of theory field and practice field's attention. In the view of enterprise operating, financing fund for enterprises' survival and development; In the view of company governance, different financing structure lead to different governing mode and governance efficiency, these are the realistic meaning for us to research enterprises' financing behavior.In China, from 1970s' later years up to now, the ratio of FDI relatively to Chinese national fixed assets investment, and total assets of FIEs (Foreign Investment Enterprises) increase continuously. Within the course, the average scale of FIEs becomes larger and the function of FIEs is systematized cross all the fields: production, marketing, R&D, financing, and capital operating, especially after through restructuring their business unites, in which process the coordination between these related factories also has been being improved. There are several characteristics of FIEs financing fund in China: (1) Capital structure. FIEs structure is low liabilities and low long-term liabilities. (2) Interior and exterior financing. FIEs depend on the direct investment of parent company, the first is interior financing fund, the second is exterior liabilities financing. There are few FIEs that financing fund by the IPO. (3) Local financing and foreign financing. To the best of their abilities, FIEs financing means is loan from the local bank or other local finance framework, the fund of the FIEs are from local. (4) Long-term and short-term financing. The main methods of FIEs to resolve the long-term fund are depending on the direct investment of FIEs and local cooperation partner. The main means of FIEs to resolve the short-term fund is depending on RMB loan from local bank. Main financing means. Direct investment and RMB loan is the main financing means of FIEs to resolve the long-term and short-term fund demand in our country.In the end, Then the paper analyzes the total quantity, structure, and power financing Chinese FIEs. there are several policy propose to optimize the financing structure of FIEs in China. The first is that financing means develop to the securities market, and the mode of company is changed to do IPO for their company or to enter the securities marke with another shell borrowed from another enterprise which shares had been issued in the China securities market . The second is in the policy of two income tax law combining, FIEs decrease the interior financing ratio, researching indicate, increasing the tax ratio cause the interior financing is more impressible than the exterior financing, namely FIEs will prefer to the multinational interior liabilities, and not the exterior loan; otherwise, the related the loan of exceeding the ratio of tax deducting should change to the exterior loan.