The Research On The Promoting Effect Of Venture Capital For The Development Of Small And Medium-sized Enterprises In China

Large enterprises reflect the strength of a national and regional economy, but small and medium-sized enterprises, is the guarantee of a national and regional economic vitality. SMEs played an irreplaceable important role of large enterprises in the promotion of market competition, increase employment opportunities, and make life easier for the people to promote technological progress, and promote national economic development and safeguard social stability. However, SMEs in economic development has been plagued by some deep-seated problems, the prominent problems are backward technology, lack of personnel, lack of funds, lack of demand, excessive competition, poor product quality, low labor productivity, the loss rate and so on. These problems have added China’s economic development great difficulties in a new age, if you do not study and resolve the aspects of sustainable development of SMEs, there may even slow down the development of the entire national economy in the new century. How to further support and promote SME development is still an important topic which is urgent need to study and solve at present.SMEs and large enterprises in market competition not only segment the market, but also respond to pressure from foreign companies. SMEs carrying out technical innovation process, financing is the first problem, therefore actively introduce venture capital is essential. Since1985, the State Council approved the establishment of the first venture capital firm in China-China New Technology Venture Investment Company (referred to as start-ups, CVIC), China’s venture capital industry has been developed for27years, but there are a lot of problems in the development of SMEs in China venture capital industry. Therefore, in order to more effectively promote the development of Chinese small and medium enterprises, venture capital system in China needs to improve. The paper’s main research method is comparative analysis, through the analysis of small and medium enterprises venture capital policy in developed countries and areas, sought to explore the most appropriate mode of China’s risk investment and the development of small and medium enterprises; In addition, this article also tried to combine theoretical and empirical, combining qualitative and quantitative analysis, factor analysis and analysis of the Panel to study the issue of venture capital for SMEs in China.This article is divided into a total of five parts:the first part, the article describes the thesis background, purpose and methods, as well as the paper content and structure ideas. In the second part, on the basis of reviewing the field of venture capital at home and abroad dynamic, small and medium-sized enterprises and venture capital’s concept and basic theory are described, and analysis the world’s countries (regions) SME policy. In the third part, this article analysis the SME development conditions, problems of venture investment in China, current status, as well as interaction between venture capital and SME development in China. In the fourth section, the use of factor analysis and panel analysis for the analysis of the characteristics of the development of SMEs of38companies listed on the small board in2004to2010data, in2004in China and analysis the promotion of venture capital to small and medium enterprises development. Finally, from both theoretical and empirical aspects we summary of the several policy recommendations on the development of venture capital for SMEs in China:(1) expeditiously formulate the development plan of China’s venture capital for SMEs;(2) to increase policy support for SMEs risk investment;(3) to speed up the construction of market system of venture capital for SMEs;(4) to broaden the financing channels for venture capital for SMEs;(5) to cultivate high-quality professional venture capitalists and entrepreneurs.