Improve The Financial Companies In China's Financial Services

The finance companies affiliated to the big enterprises groups are new financial institutions emerged during the process of China's economic and financial systems reforms. Meanwhile, those state-owned enterprises groups play a crucial role in the growth of China's national economy. Conducting research on the finance companies may significantly promote the development of big enterprises groups and the improvement of modern financial system in China. My thesis for the Master Degree is a study on some key issues regarding the finance companies.This thesis consists of four sections. The first section provides a basic analysis of the finance companies: i) The definition of the finance companies in general and the specific subjects in my study; ii) Summary of practices from domestic and international finance companies; iii) The importance of developing finance companies, which will not only help the enterprises enhance their funds management, but also promote the development of a healthy financial and credit system, as well as the financial market.The second section analyzes the evolution of China's finance companies and the problems facing them, i) A review of the four development stages of China's finance companies, ii) The status quo and problems facing these companies, which include the following aspects: (1) Imperfections of the financial market impede the development of the finance companies; (2) Limitations of fund resources affect the progress of the finance companies; (3) The business of the finance companies cannot fulfill the task of providing better services. (4) The risk management systems of the finance companies still need improvements.The third and the forth sections propose some strategies to foster the finance companies' development. The author believes that the finance companies should attach great importance to improve their financial service. The third section focuses on how to improve the service of finance companies, which include financing for the enterprises groups, providing financial service to the sales department, and thegeneral investment bank business. The finance companies should establish their key operation fields in accordance with the needs of the groups they affiliated to, and try to expand the channels of fund raising, such as, issuing commercial papen CD, and mid-long term bonds. Meanwhile, the finance companies in the car and electronic products industries should expand their business of bussiness financing and consumer credit, and the finance companies in the capital-intensive enterprises, e.g. the electric power and petrol industries, should develop some general business of investment banks.The last section of the thesis analyzes the five risks facing the finance companies and discusses methods of risk evaluation. As a member of the financial institutions, the finance companies must establish an effective risk-prevention mechanism, which is a safeguard for their business. Finally, the thesis proposes some strategies on risk management of the finance companies.