A Research On The Financing Problems And The Mode Of The Credit Guarantee Of Taiwanese Firms Investing In Mainland China

Since the economical and trade relationship between the mainland and Taiwan was recovered in late seventies in twenty century, the economical and trade relationship has developed to a considerable scale from the scratch. The economical and trade relationship between the mainland and Taiwan has become closer and closer, especially when China participated in WTO and the promises were carried out gradually.Recently, Taiwan has become the fifth biggest trade partner and the third biggest import region of mainland China; on the other hand, mainland China is the biggest trade partner, the most important export market, the biggest import region of Taiwan, mainland China is also the place from which Taiwan get the biggest trade surplus. But the relationship is still in an indirect, one way, folk and malformed developmental pattern because of the persistent critical political relationship between the mainland and Taiwan. In this pattern Taiwan entrepreneurs investing in the Mainland face a lot of difficulties in investment, and the most important problem which is eager-needed to be solved is the fund-raising problem.This paper, discussed the problem of how to solute the difficulty of fund-raising for Taiwan entrepreneurs in mainland. Firstly, we describe the significance of researching this topic and the structure of this paper. In the second chapter, we introduce the basis of relevant theories. In the third chapter, by analysis the demand and supply of the funds of Taiwan entrepreneurs investing in Mainland, we discover that account to Taiwan and mainland's policy restrictions, especially that the majority of Taiwan businessmen investing in mainland are Small Medium Enterprises(SMEs), in a long time, their credit structure are imperfect, financial situation are in low-class of transparency, and the pledges are insufficient, the above all put them to face the difficulty of loaning from bank and financing from market, that the Taiwan businessmen in mainland confronted. From an economic point of view, the difficulty was caused by information asymmetry and imperfect system of institution.In the fourth chapter, firstly we analyze that establishing the credit guarantee institution is the useful way to solve funding problems for Taiwan entrepreneurs on Mainland. On the base of introduced and compared in detail credit guarantee systems for SMEs in Japan, America, Taiwan of China as well as in Mainland China., we analyzed features and current problems in China's guarantee system for SMEs and attempted to formulate a new system that may solve funding problems for Taiwan entrepreneurs on Mainland. Moreover, the paper, based on the game theory, analyzed the maximum gains for all three parties concerned in the perfect information game and offered some suggestions on government and enterprise policies.