Improve And Standardize The Chinese Small And Medium-sized Enterprise Financing System

After three decades of reform and opening up, small and medium-sizedenterprises (SMEs)have grown into an important part of Chinese economy,andcreate about60%of gross domestic product per year.However,Chinese SMEsobtain the financial resources and the value is created by them are completelyunequal. It is very difficult for Chinese SMEs to obtain the capital from normalfinancing channels, that underground private banks in china are highly activereflects and proves this fact.Therefore,this paper plans to study how to improveand standardize the Chinese SMEs’ financing system,and help them to solve theirfinancing problems.This paper could be divide into four parts.The first part is mainly tointroduce the criterion of SMEs and the enterprise financing theories, and userelated theories to explain why SMEs have financing problems.The second part ismainly to study America,Japan,Taiwan, Bangladesh and South Africa’s financingmodes of SMEs,so that we can find out some valuable experience for us touse.The third part is mainly to introduce the current financing situation ofChinese SMEs, and analyse the internal and external reasons of financingproblems.The fourth part,on the base of previous research and analysis,putsforward some specific suggestions to improve and standardize the Chinese SMEs’financing system.In the aspect of perfecting the government responsibility,the governmentshould perfect the legislation of the SMEs’ financing system,increase thepreferential policies of finance and tax,set up high grade administrativeorgnization of SMEs,guide and regulate private capital to play a greater role infinancial services,and strengthen the financial supervision.In the aspect of perfecting the indirect financing channels,the Chinese SMEs’financing system should encourage to set up more small and medium-sizedbanks,set up and perfect banks,guarantee institutions and re-guaranteeinstitutions’ cooperation system,form the system with policy guarantee institutions as the lord and private guarantee institutions and mutual guaranteeinstitutions as the servant,estabilsh the national and provincial re-guaranteesystem of double insurance, establish an independent credit rating and creditreporting system,encourage and develop diversified indirect financingchannels,such as financial leasing companies,pawning house.In the aspect of perfecting the direct finacing channels, the Chinese SMEs’financing system should focus on the development of the growth enterprisemarket(GEM), over the counter market(OTC), risk investment market and SMEsbond market. In the aspect of GEM,it should perfect the issuing system,strengthenthe supervision of the using of additional founds raised,extend the ban deadline ofstock trading in order to prevent the excutives from resigning for cash,improvethe information disclosure system,supervision system and investors’ appealsystem,etc;in the aspect of OTC,it should build a national standardized unifiedsupervision OTC market,cancel the legal restrictions of the joint-stock enterprisesshareholders no more than200persons in order to make a bedding for increasingdiversified investors,improve the interworking system between OTC market andGEM so that it is convenient for the enterprises in the OTC market to be listedand the listed enterprises to be delisted,and perfect the exit system andinformation disclosure system;in the aspect of risk investment,it should improvelegislation on the risk investment,strengthen the protection of intellectualproperty rights,increase the investment to improve the technical conversionrate,improve the exit channels of risk investment, strengthen professionalpersonnel training,and establish venture capital funds which is the governmentfunds as the initial capital and is mainly depended on private capital;in the aspectof bond market,it should focus on the development of issuing business of SEMsjoint bond,sum up and improve the implementation rules of SEMs jointbond,strengthen the government coordination,and have a try to issue private debtfor SMEs at the right time.Finally,this paper suggests that SMEs should strive to improve the financialtransparency and management capability, and solve SMEs’ financing problems through improving their own quality.