Industrial Cluster Based Financing Of SMEs

In recent years, SMEs in China have enjoyed a fast-developing period. Their great importance have been evident in creating job opportunities, market prospering, encouraging investment, technology innovation, and promoting export, etc. In particular, due to the recent global financial crisis, the issues of financing and operation of SMEs become more prominent in China since the second half of 2008. On Jan 5th, 2009, the State Council set up a working party aiming at supporting the development of SMEs, which was led by the vice-premier, Zhang Dejiang. Later, a series of policies and measures were formulated by the government to support SMEs, which target at improving the business environment for SMEs. While the production and operation of SMEs has been promoted, their growth future is still uncertain. Since the reform and opening-up in 1978, the industrial cluster has been rising at high speed in China. There are thousands of industrial clusters of different levels in China. And the industrial clusters have become the significant motivation in economic development, especially in regional economic development, such as Zhejiang, Guangdong, Jiangsu, and Fujian. Although the industrial cluster provides good business environment for SMEs, a number of problems exist in them, particularly the financing problems.The development of SMEs in industrial cluster is affected by a number of factors, among which financing difficulty is of the critical problems. Viewing on this, the paper stresses how to deal with such problem in industrial cluster environment.The paper mainly conducted the research about the financing problem of SMEs based on industry cluster with a case study of Nan'an plumbing industry. The paper is organized as the followings. Firstly, in the introduction, the related theories and definitions are introduced. It also covers the situation of Nan'an plumbing industry and the financing problem of SMEs in the industrial cluster. Secondly, the case study is emphasized on the analysis of the financing of one enterprise in Nan'an plumbing industry. Finally, the conclusion sums up the proposals about how to solve the financing problem of SMEs in industrial cluster. The interrelated seven parts drives a new train of thought to figure out the problem step by step. On the one hand, SMEs should improve the financing capacity themselves. On the other hand, to construct an appropriate financing environment for them is important. It is proposed to reduce the financing difficulty of SMEs in industrial cluster radically that SMEs promote their level of management, the government helps SMEs to develop with more policies and measures, the financial institutions strengthen support for SMEs on credit loan, and new financing methods come up.