A Study On Credit Financing Of China's Middle And Small-sized Enterprises In The Framework Of WTO

This article stands the credit financing of China's middle and small sized enterprise (M&SSE) in the framework of WTO. Firstly, in times series, M&SSE, much needed for credit financing, are defined both quantitatively and quantitatively in terms of scale and their positions .The difficulty of M&SSE' credit financing is closely related to some features of M&SSE. Firstly, it is hard for M&SSE to absorb investments because they are easily influenced by environment that causes high risks. Secondly, with small assets, M&SSE are incapable of taking many debts. Thirdly, the complex of M&SSE's credit financing is emerged by their short capital requirement at one time that increase financing costs. However, the development of M&SSE much requires the credit supporting of financial institutions. Further in this article, pointing to M&SSE's difficulty of credit financing, several theories have been introduced including the interest rate decision theory of western economics, Marxism's interest rate decision theory and asymmetrical information economics theory. Information asymmetry could lead to adverse selection and moral hazard of band credits. A few measures have been put forward against adverse selection and moral hazard.In the framework of WTO, it is different for the national environment of M&SSE's credit financing. Firstly, the people's bank of China at all levels take various measures to strengthen financing institution's credit financing service to M&SSE. Secondly, financial department take a series of practical measures to enhance M&SSE's credit financing. Thirdly, foreign-founded banks compete with their local counterpart by means of internet banking system, which supplies a new approach for M&SSE's credit financing and, thus, brings new opportunity to the presence and causes of M&SSE's credit financing in China.The presence is featured by capital requirements and service conditions of China's M&SSE's credit financing. With the development of China's M&SSE, it is much needed for huge capital investment that is now far away from being sufficient to some extent. As a result, the growing speed of M&SSE has to slow down without sufficient capital. To reach their financial requirements, it is necessary to observe operating traits of M&SSE and correspondent capital requirements. For a long time, it is not paid much attention for M&SSE's credit granting and other financial services in China. Recently, the situation has been improved with more cares from the banking industry. Meanwhile, with deepened understanding on M&SSE from various social circles, the credit guarantee system and financial system are gradually constructed and matured around China, aiming to prompt the healthy development of China's M&SSE. There are many factors that contribute to the cause for the difficulty of M&SSE's financing. Thesefactors involve M&SSE, financial institution, intermediary agency and national supporting policies. Factors concerning M&SSE lie in their difficulties of acquiring mortgage guarantee for credit granting. Firstly, the mortgage of M&SSE does not cost much. Furthermore, it is difficult for M&SSE to find any guarantee parties because companies with good profit are usually unwilling to guarantee for other ones. In addition, the mortgage guarantee can hardly conducts due to some M&SSE's incomplete financial system. Secondly, M&SSE lack in a mechanism of self-accumulation. Thirdly , high debt and high debt right .Despite their development enterprises self -owned capital increases little ,leading to the growth of their debts .However , there are few actual enterprisers and investors although people are becoming rich .As a result ,main saving parties and investing parties are separated seriously. Factors of financial institutions express defects of their operation mechanism. So far, the property rights misplacement of four to P state-owned commercial banks is still unsolved, leading to the distort of banks' control, banks' bad-debt rate, growth of credit granting risk, worsened operation and influenced granting abiliti...