An Exploration On Financial Difficulties In China’s SME’s Dongying City As One Example

Since the reform and opening up, China’s economic development has made remarkable achievements, which small and medium enterprises (SMEs) to promote domestic economy has played a key role. SMEs has increasingly lift up the contribution to the national economy, especially in the following aspects-ensuring national economy moderate growth, alleviating the employment pressure, conducting scientific and technological innovation, optimizing the economic structure. However, since the spreading of international financial crisis caused by American subprime mortgage crisis, international economy has turned down with the European debt crisis and India small credit crisis. China’s economy is also affected by the influence of different degrees, and after that, our SMEs’ business environment worsens sharply combined with insufficient overseas market demand, export hindering, the market atrophy, and increasing losses. SMEs’ financing difficulties and problems have arised. The difficulties in financing and loans have become the bottleneck to restrict the progress of them. By the international financial turmoil and domestic bank’s credit crunch, SMEs’ financing difficulties increase, financing channels seize up, operating pressure rises.Comrade Deng Xiaoping once proposed:" Finance, as the core of modern economy, is very important. If it works well, there’s a move to live, and everything survives." Government work report of the state council in2010put forward to further promote the development of SMEs-broadening their financing channels, and earnestly solving their financing difficult problems, especially for the small ones. Therefore, great significance exists in careful studying and dealing with the financing difficulties in bettering SMEs, as well as creating appropriate financial environment for them.Based on this background, Dongying has been taking as an example to discuss and analyze the financing difficulties in China’s SMEs. Through the analysis of the international and domestic economic and financial situations and deeper discussion on more domestic and foreign SMEs’ financing form, financing modes, this thesis illustrates present financing situations and difficulties in the SMEs of Dongying to explore the ways to establish win-win mechanism between domestic SMEs’ characteristics and the requirements of their financial institutions. As suming up the advanced experiences and methods in domestic and foreign fields, the thesis also contributes the feasible measures to set off the finacing difficuties in SMEs. SMEs’ hindering blocks will be eliminated as soon as possible, under the ways of Making full use of domestic and foreign resources, simultaneously, actively adopting policy guidance, arousing and exerting competitive advantages of folk capital services. Therefore, they will acturally achieve "corner overtaking" to build a good solid foundation for the rapid and healthy development of the whole national economy.The main innovation points are as follows:i Putting forward to mobilize and play folk capital services to SMEs and the service of entity economy to establish and improve the folk capital sunshine operation mechanism; formulating relevant laws and regulations, and improving the relevant rules to make folk capital under legal operations; raising folk capital to help enterprises developing necessary and beneficial supplements from the use of foreign and bank capital.ii Strengthening the principle of Banks and other financial institutions to SMEs’ service and grassroots service; calling up necessary public and policy guidance, perfect supervision system to converse the liking tendency of financial institutions to cooperate with large enterprise, however, despising to set relations wirh little micro enterprises.iii Through bettering the financing guarantee system and strengthening risk controls to implement the financing guarantee in the county economy-Dawang model of Dongying.