Research On The Mode Of Investment And Financing Of State - Owned Development Companies In The New

Chinese government put4,000billion yuan into the market to stimulate China’s economy after the2008global financial crisis. The money was mainly spent in infrastructure construction through government’s local financing platforms. Though this gesture helped the government achieve its goal of keeping the economy growth rate at8percent or more, it has caused many problems. As a result, Quasi-municipal Bond and local financing platforms are attracting public attention and the government has enhanced its supervision and control on local debt. State-owned development companies-as the executers of city infrastructure construction-are faced with difficulties in both investment and finance raising, which make companies confused in their future way. Thus, study of investment and finance raising mechanism of state-owned development companies in the new era is not only meaningful in theoretic ways but also in realistic ones. This paper starts with the situation state-owned companies are facing, brings it to a theoretic level and comes up with new mechanism of investment and finance raising as well as new business model.The paper is consisted of five parts:Chapter One, the Introduction, states about the background and significance of this study, reviews the relevant literatures. It also gives the logic and method of this paper.Chapter Two writes about stated-owned development companies and investment and financing platforms of local government. This part begins with the concepts and relationship of them, reviews the mainly developing road of stated-owned development companies, and then analyses its current situation.Chapter Three analyses in detail the features and problems of investment and financing of stated-owned development companies, the past way of its developing and the main model in current.Chapter Four introduces the experiences of the US, Britain and Japan in investment and financing raising of local governments, bringing up the necessity of renewing the model of investment and financing of our state-owned development companies. The paper writes at both the policy level and practical level, gives ways of model innovation using examples. The main ways given to promote the development of companies include to raise capital through bonds, trust funds, stock, franchise and organize company cluster.Chapter Five explains the general situation of business model, states the necessity of business model transition of state-owned company from strategic point of view, gives ways of innovation using real cases, including technical and operating innovation to enhance profitability.The contribution of this paper is that it starts with the real situation, analyses the difficulties facing state-owned development companies and brings up ways of mechanism innovation, which is helpful in dealing with reality problems.