New Thinking On The Solutions Of The Difficult Financing Situation Of Privately-owned SMEs In China

The financing problem of SMEs is a world-wide problem. With over30years of reform and opening up, privately-owned small and medium enterprises has gained a rapid development in China,playing an increasingly important role in prosperity of the economy, innovation of science and technology,and expansion of employment.However, privately-owned SMEs has always been in an inferior status in accessing to society resources,especially financing resources,which is disproportional to privately-owned SMEs’ huge contribution. Although the Government has adopted a series of financial measures to improve the situation,but the financing problem has still not been effectively addressed,and the problem becomes even more serious when macro economy policy tightened.The paper focuses on the issue of difficult financing situation of privately-owned SMEs,but to analyze it from a wider perspective.The article suggest that more emphasis need to be placed on the privately-owned SMEs’integrated business environment instead of studying the financing situation in isolation. The difficult financing situation is not only stems from the straitness of external financing,but also owing to the diminished capacity of internal financing,which is due to the deterioration of SMEs’ integrated business environment.The article point out that the the ultimate purpose of addressing the SMEs financing problem is to promote the development of privately-owned SMEs.Therefore,we need to build a favourable integrated business environment as well as expand the access to external financing resources for SMEs,by this way,the capability of internal financing of SMEs will be improved,which is of great benefit to privately-owned SMEs’ sustainable development in a long term.The paper uses the methods which are quantitative analysis and qualitative analysis, the macroscopic analysis and the microscopic analysis.Firstly,based on the summarizing and absorbing of researching results of both home and abroad,the article combining the operation and financing charactristic and present condition of privately-owned SMEs,analyze the factors that leads to the difficult financing condition from three different perspectives,which are enterprises,finance system and government support.Secondly, the paper introduces a brand new example of Wenzhou financial reforms as a new case of development of privately-owned SMEs’financing situation,and make a specific analysis on its achievements and insufficiencies, illuminatest that a great effort is still needed to promote the institutional supply and fullfilment of finance system.Lastly,the paper illuminated the countermeasures and suggestions on the improvement of difficult financing situation from three levels, which includes providing more policy supports,deepening the finance reform and perfecting the finance system, self-improvement of SMEs.In a conclusion,the article indicates the main viewpoint of establishing a comprehensive support system to improve the difficult financing situation of privately-owned SMEs in China.