Research Of SME Financing In Shanghai Pudong Development Bank

China is fast developing into Asia's even world's economic center after the 21st Century. Such a progress can be attributed to the take-off of tens of thousands of SMEs besides the sound performance of hundreds of large SOEs. According to MIIT's data, SMEs account for 99% of all Chinese businesses,60% of the economy,50% of tax revenue and 80% of employment. SMEs directly impact social stability. Without SME, there will be no progress for China's economy.However, SME's biggest challenge is lack of financing. It is caused by problems in three folds. There are problems related to public policy:underdeveloped service sector, credibility system and financing channel; also problems embedded in SMEs:substandard internal management, lack of information disclosure and guarantee; and problems of commercial banks:asymmetrical information, high transaction and control cost and underdeveloped process and products. SME's financing difficulty is both outstanding and complicated. More and trickier issues are popping up despite multiple pro-SME measures put forward by government and banking sector. This prompted us to seek underlying answers to the problem. Among the many financing methods, commercial bank loans are most important and most problematic, therefore warrant serious research.The scholarship in this area is relatively fragmented, despite considerable study being done regarding the SME financing issues. Much of the result stands aloof from the banking practice, therefore not able to help SME banking substantially.The paper seeks to combine decades of working experience at Shanghai Pudong Development Bank with financial theory in analyzing status and problems of SME financing at the Bank. The writer also draws heavily on the Taiwan experience and best practice in order to figure out feasible solutions for the Bank and contribute more generally to the sound development of China's financing system based on commercial bank loans.