Research On International Trade Finance Of Small And Medium-Sized Foreign Trade Enterprises

Reviewing the history of the development of international trade, we can see an increasingly closer relationship between international trade and banks. The development of international trade demanded the growth of financing. And financing from banks enlarged the enterprises' scale, therefore stimulated international trade. They relied on each other, supported each other, promoted each other and got a great progress together. Capital is one of the most important foundations of an enterprise dealing with foreign trade. Since the transformation of China from planned economy to market economy, a historic change has taken place on the capital supply system of foreign trade enterprises in China. Banks have become the main channel to finance foreign trade enterprises instead of Ministry of Treasury. The reform of capital supply system aimed to set up an efficient promotion mechanism and restriction mechanism within the enterprises by the reform of financing structure, making the governors more care about the benefit of capital and avoid the low efficiency. Nowadays, capital shortage has been the "bottleneck" of foreign trade enterprises' development especially for those of small or medium size in china, and being incapable of getting financing has been the block in their development all along. The article aims to analyze and compare the characteristics of different international trade financing modes, and to help small and medium-sized foreign trade enterprises chose appropriate trade financing modes in order to break through the predicament of lack of capital. In Chapter 1, the author makes a review of the international trade financing development history and concerned theories, and analyzes the essentiality of international trade financing to small and medium-sized foreign trade enterprises. The modes of export trade financing and import trade financing are expounded separately in Chapter 2. The export trade financing includes Loan and Overdraft, Packing Loan, Outward Bill Purchased, Export Discount, etc. And import trade financing includes Limits of Letter for Credit, Trust Receipt, Inward Bill Purchased, Delivery against Bank Guarantee, etc. Forfeiting and Factoring are also expatiated in this part as the latest developed modes in China. In the 3rd chapter, the article makes an analysis on the costs of international trade financing and gives some examples. In Chapter 4, the author lists most kinds of risks that banks and enterprises might encounter in international trade financing, and gives principles and measures of risk management. In the last part, Chapter 5, the article discusses how to prevent the risks of international trade financing mainly from the point of view of enterprises. Based on the previous research, the author tries to put forward some opinions of her own, in order to give some help to small and medium-sized foreign trade enterprises in their international trade financing.