A Comparative Study Between Enterprises' Short-term Financing Coupon In China And Commercial Paper In The United States

Short-term financing voucher is a new financing tool which was issued in 2005. Although the short-term financing securities as a financial tool for innovation appeared late, due to its unique nature (currently the world only China issued), since May 23, 2005 it issued, there were many Chinese scholars to study it. In this paper, we introduce the short-term financing voucher of the prevailing definition, history, the issuance of the status, and so on. We use corporate financing theory and the theory of credit shortage as a short-term financing certificates basic theory. With the United States of commercial paper, we think short-term financing coupons are of practical significance for our country. Short-term financing voucher has positive significance to our financial market development and it will help commercial banks improve business. A short-term financing voucher is a new financial tool for innovation. Therefore, there are still many problems and shortcomings. We try to make some improvement measures and suggestions. This paper is divided into the following five sections:The first part is the introduction. Firstly, we introduce the meaning of the topics for this paper. In today's world, there is only our country that has issued short-term financing vouchers. Therefore, studying short-term financing vouchers will have theoretical and practical significance. Secondly, we introduce the issuance of the status. Now in the other country, there is no person who has studied short-term financing voucher. But in our country, there are many people who are studying short-term financing voucher. Thirdly, this paper uses corporate financing theory and the theory of credit shortage to study short-term financing voucher.The second part introduces the background of short-term financing voucher. Firstly, we classify the current studying of short-term financing voucher. Nowadays, there are three kinds of perspectives about short-term financing voucher: One is agreeing, and they think that the issuing of short-term financing of vouchers is favorable to the business of commercial banks, money market and securities market. One is doubts, and they think that short-term financing voucher can not fundamentally solve the problems, such as the problem of the difficulties in financing for the middle and small enterprises, and they also think short-term financing voucher has the problem by itself. There is a compromise with the attitude, and they think short-term financing voucher has not only challenges, but also opportunities. Secondly, we introduce corporate financing theory and the theory of credit shortage. Credit gap theory explains the reasons for the issuance of short-term financing vouchers. Corporate finance theory explains the necessity of issuing the short-term financing vouchers. Thirdly, we introduce the development status of our country in short-term financing voucher, such as the definition and development of short-term financing vouchers, the features and advantages of short-term financing vouchers, the procedures of short-term financing vouchers for issuing certificates, the procedures pricing of short-term financing vouchers, the categories of short-term financing vouchers, short-term financing vouchers issuance of such status and so on.The third part is the comparisons between short-term financing bills in China with Commercial Paper in the United States .We have made comparison from the following seven aspects: Firstly, CP issuers are often financial companies, and the financing coupons are mainly for non-financial enterprises. Secondly, average duration of CP is about 30 days, and average duration of financing coupons is mostly one year. Thirdly, CP must provide liquidity to pay up; there is no request for financing coupons. Fourthly, securitization credit enhancement has been applied in CP market; the risk of financing coupon mainly depends on the issuer's credit. Fifthly, assets-back CP grows rapidly, and asset securitization in China is still at the pilot stage. Sixthly, CP can be issued either directly or by underwriting, and the short-term financing securities can be issued only by underwriting. Seventhly, the investor of CP is diversified; however the short-term financing coupons can be traded only at the inter-bank bond market. Our conclusion: by comparison, despite the short-term financing coupons and the United States has similarities in the form; there are still many significant differences.The fourth part points out practical significance of short-term financing securities for China. Firstly, issuing short-term financing is necessary for China. Short-term financing coupon is fit for our high savings, low-consumption model of economy growth. The development of short-term financing vouchers is helpful for the financial stability. The development of short-term financing bill helps improve SME's financing situation. Secondly, the issue of short-term financing certificates has an important role and influence: firstly, it has a push role on the financial markets, helps to promote the development of money markets, coordinates the development of monetary market and capital market, and provides a favorable market environment for implementation of stock market's reforms. The issuance of short-term financing coupons contributes to the empowerment of corporate bonds market and promotes the development of enterprise bonds. The issuance of short-term financing certificates will play a good role in promoting the innovation and development of financial tools, financial technology and financial institutions. Secondly, they promote the commercial banks'business innovation and institutional restructuring, optimize the Commercial Bank's structure of assets and liabilities, and help to promote the comprehensive management of commercial banks in order to be transformed into the financial holding company. Thirdly, it also has significance on the development of the money market funds. Fourthly, it also helps form a reasonable investment and financing structure, help the listed-companies to broaden the financing channels, helps savings be transformed into investment, and expand the direct financing.The fifth part is the suggestions to the problem of the currently short-term financing voucher. There are such following questions of short-term financing voucher market: firstly, issuance immature; secondly, the issuance market degree is not very high and credit rating mechanism should be improved. We suggest that: firstly, we should improve information disclosure regulatory mechanism, create a good external environment for the short-term financing voucher market development; secondly, we should accelerate market development further to lay a solid foundation for the short-term financing voucher market development; thirdly, we should further improve the Credit Rating System, to provide relatively objective guidelines for the participants of short-term financing voucher market; fourthly, we should simultaneously develop the corporate bond market and other long-term direct financing market.