Sme Financing In The Government Support System

As an important role in developing china's economy, the small and medium enterprises (SMES) contribute greatly to market development, industry upgrading, job offering and revenue increasing. While, with the competition in the market becoming much fiercer, the SMES have faced much more difficulties than before.Among all the difficulties the SMES have to face, the finance difficulty can be the biggest obstacle. Lacking of fund during the process of research and production extremely prevent the SMES'developing. The reasons why so many SMES have the problem to raise money can be two main facts. First, the amount of fund for SMES are great due to the large number of the SMES in china; second, the poor performance of the SMES including bad management, weak capacity of production and unstable cash flow leads to the difficulty of expanding and development of the SMES.In fact, the help from government to supporting the SMES'development is essential for SMES. In many developed countries or areas, such as USA, UK, Japan and Korea, their government all take effective measures to solve the SMES'financing problems, including policy support, favorable loan, low-rate tax, etc. compared to the developed countries or areas, our country offer less support to SMES which worsen the finance situation of the SMES.This article is aiming at analyze and list the effective measures taken by the government to solve SMES'finance problem to foster the SMES'development. The article begins with the basic finance theory in the academic area to lay theoretical foundation for the problem-solving of the SMES'finance difficulty; afterwards, the article explains the reasons of current problem of SMES in the aspect of finance problem. In the third part of the article, the emphasis is put on the introduction of the advanced measures taken by other governments in developed countries or areas to give the guidance for our country. At the end of the article, the detailed ways to establish the sound supporting system for SMES are highlighted, especially in the aspect of government' support to increase SMES'competitiveness.