Analysis Of The Financial Methods Of Power Companies In China

The Power Industry is a technological and capital intensive industry in which sufficient investments have to be made by the power enterprises in infrastructure construction and technological innovation in order to increase its production capacity. The company that is capable of obtaining sufficient funding will have more opportunities of successfully compete in the power industry in the PRC. Since the State Power Industry Policy came into effect, priority has been given to the expansion of the power related industries. Therefore, in order to be able to compete and be successful in this very demanding environment, the importance of a sound financial and completive price structure, that will lead to lower risks, remains an objective to be obtained.This paper makes an analysis of the current financial structure and addresses this problem within the power enterprises in the PRC. In order to address the aforementioned problem, this paper, in accordance with the financial characteristics of the enterprises, summarizes the major financing vehicles available to the power enterprises in the PRC. It aims further to also provides some"lessons-learned"advise based on financial structures utilized by certain developed countries and thus to provide a number of recommendations.It is concluded in the paper that the need exists to change the current traditional financing methods in order to create a more modern structure that will result in higher efficiency, lower costs and will thus be more profitable. That is, the financing vehicles should not only depends on bank loans but should also includes other financial instruments such as bonds, stocks, etc. Various financing methods will expand and improve the competitiveness of the enterprises so as to meet the requirements of the power market demands. Apart from the aforementioned, enterprises should continuously endeavour to develop other new financing methods. It is important that the concerned companies / enterprises select the most effective financial solutions in order to be able to meet the demands and special characteristics of the power industry.