Financing Of Smes In Government Policy Research

Under the planned economy, there was hardly any enterprise by its original definition in China. Capital of an enterprise was supplied through allocation of the treasury with only very few low interest loans. Since enterprises had no autonomy in raising fund, coupled with a closed financial market and a marginal channel of financial resources, enterprises were deprived of the freedom to choose methods to raise fund and the external environment in which they could make their own decisions. Therefore, the central task of the then Chinese enterprises was to complete the planned targets assigned from higher authorities. There was no need to study corporate financing.With the deepening of the reform of economic system, enterprises as the main players in a dynamic market environment must operate all their production activities in compliance with market rules. This means that the existence and development of enterprises can no longer rely on government's "fatherly" care and protective policies, but rather must grow on their own in market competition. Since market economy is a capital-dependent economy, and the development of enterprises is mainly determined by whether they have stable sources of financing, fund-raising has become a matter of primary importance. Meanwhile, the transformation of fund supply system, the maturing of capital market and the diversification of raising-fund channels, all has created conditions for autonomous corporate financing and has made the study of corporate financing sensible and meaningful.The reality in China is that enterprises of today are no longer those in the tradition sense, but they are still different from those in the modern sense. This reality determines that corporate financing especially for small and medium-sized corporate financing in China today sometimes behave in the same way as any other corporate financing in market economy environment, but it is also characterized by the real Chinese situation. In recent years, there have been new understandings on microstudies of financing and the number of theoretical in this connection has been increased, but most use the financing methods of western directly and there is hardly theoretical analyzing, especially character of economics transition of China and the using of government. In view of the current situation in China, it is stated in this thesis that the most urgent research task today is to find out origins of small and medium-sized corporate financing in the process of economic transition and give the solutions under the power of government, considering the condition of small and medium-sized corporate and the character of economics circumstance.Under the foundation of the definition of the small and medium-sized corporate, the article discusses the using of the small and medium-sized corporate and the difficulty and reason of their fund-raising. Considering the actual circumstance of China and the path about fund-raising of the foreign, the thesis gives the government's supporting policy. To address these problems, the thesis focuses on the analyzing the reason in the raising fund and theoretical foundation of the government getting involved. The thesis tries to announce to public that it is necessary and essential for the government to get involved in the raising fund of small and medium-sized corporate. We can only draw lessons from the path about fund-raising of the foreign, not the set uses. Corporate financing behaviors can only become standardized under the support of the government, when the channels of fund-raising are widened and financing environment is improved.