Financing Research, The Development Of Smes In China

As the experience of worldwide economy development have illustrated, the small & medium-scale enterprises play a positive role of enhancing job opportunities, enlivening business, pushing technology innovation and stabilizing society. Even so, they meet problems such as lack of fund and hard to circurate necessary funds, which hinder their development. How to go out of this hindrance and make good relationship between both sides of capital are very important with no doubt.This topic mainly discussed the situation of China's small& medium-scale enterprises when they meet difficulties in financing and try to find the reasons of these. By learning from the successful experience of developed countries, it hopefully gets some helpful suggestions. There are five parts as following: The first part elaborate the important role of China's small& medium-scale enterprises have played in economy, which attract our attention to the topic.The China's small & medium-scale enterprises have made great progress and played an important role in our economy since the renovation and open up policy in 1980s. Western China is short of fund, but sufficient in labor force, these make the small& medium-scale enterprises have more advantage in this undeveloped area and very important in western China development strategy .As we have seen, China's small & medium-scale enterprises have brought much job opportunities, which is essential to social stability; they always make agile response to the market and act quickly because of their more flexibility; To make a living, they also bring many new ideas and innovation to compete with big companies. All these make them possible to adopt fund.The second part analysis the method and difficulties China's small & medium-scale enterprises meet in searching fund. The mentioned methods includes to get loan from bank, to circurate fund by credit insurance or from stock market , venture capital, partnership enterprise, financial leasing and so on.The difficulties are as following: The credit system of China's small & medium-scale enterprises are far from perfect, so the bank are reluctant to loan; The blocked way of Circurating fund ,short of capital market and un-development bank system all make them lack of fund. And also the government should fasten and complete the regulations of the field.The third part analysis the reasons of above difficulties for the purpose of improvement.The low information transparency and high cost of financing are two main reasons. The information un-symetry result in the financial market to select reversely, and bring disadvantage in mortgage and guarantee to get fund. Doubtless, there are reasons from the small enterprise themselves.The fourth part make an introduction of American's and South Korean's small & medium-scale enterprises, collect some experience of how their government do to help the small& medium-scale enterprises. Short of fund is a worldwide problem, especially of the early stage of small & medium-scale enterprises. For this reason, many developed countries try to waken the monopoly role of big companies and help small & medium-scale enterprises to get fund. They know that dynamic small& medium-scale enterprises are the basis of healthy economy.There are many successful experiences our government should learn, for examples: set special department at government or financial organization to subsidize small& medium-scale enterprises, build relative regulations, special fund and financial guarantee system; develop venture capital for hi-tech; enhance funding methods; improve social service system, and so on.The last part summarize all the above to raise suggestions of how to integrate the resources and enhance the ways of funding.To get the financial organization's supporting, small& medium-scale enterprises have to do the following: convert the concept, build-in themselves, improve their capability of absorbing financial service. They also have to build good credit,...