The Research On Motivations About The Guarantee Circle Of The Listed Company

Our country has a high speed development during the twelfth five year plan, we faced with the economic crisis positively and adjusted our mode of economic growth, now we are moving to the so called new normal step by step. It put forward higher requirements to us with the deepening development of China’s economy, the internationalization of RMB and the Interest rate liberalization. All of these need the market optimize the allocation of resources to make sure that the companies could acquire the money through the guarantee outward under the law. However, as we saw that the loan of guarantee in our country appeared some problems and it brought us a lot of detriments. How the circle of the guarantee to form and how many subjects took part in it are more important for us to know the loan of the guarantee. Only by catch the main reasons can we face the problem and also solve them, which could make sure that the guarantee behavior grow under a healthy environment.So the article will go in 5 sections. section 1, we will tell the background, purpose and the method of the article; section 2, we explain the concept of guarantee, we also analyze the data of countryside and then draw the structure chart of the guarantee, so we can using the chart to classify the circle of the guarantee in our country; section 3, we analyze the feature of the guarantee, we tell the case of the circle of the guarantee of Henan province as well, we also divide the circle of Henan into two part by the year of 2009; section 4, we analyze the case carefully and do the research of motivation of the circle from broader aspects; section 5, according to the motivations and the problems, we take some meaningful suggestions about the circle of the guarantee in different aspects, which could provide us a favorable environment for our guarantee.Our article analyze the circle of guarantee of our country from the macro-perspective and analyze the case of Henan from the micro-perspective. We find out the motivation of the circle. as time goes on, the complicated web structure becoming less, on the other hand, the simple structure which are consist of the chain link type are becoming more and more. The near location of the company and the similar industry will facilitate the low cost guarantee between the companies; the listed company’s parent firm would use fund appropriation, private placement or acquisitions to convey the profit to itself some time. The management team could control the expense items to occupy the profit of the company; restricting power of the other type investors is much less because of the little proportion of equity, so they could not supervise the circle of guarantee effectively. From the aspect of the ownership, we find that the state--owned enterprises have much more opportunities to shape the circle of guarantee and the disassembly of the circle often because of the funding crisis of the private enterprise. From the aspect of the banking, the nationalized banks and the joint-equity banks are more likely to support the state-owned enterprises to issue loans. The banks even ignore the potential risk some times to issue a loan to them so that the banks could finish their missions. From the aspect of the firm, the false information, the opacity of the information will urge the guarantee relationship come into being in a cloak of hypocrisy. From the aspect of financial ecological environment, we argue that a lower credit level, efficiency of administration and transparency, judicial fairness and a higher debt level, proportion of debt financing will all push the formation of the circle of guarantee, especially the vicious circle. Firms in this circle would encounter many troubles and the circle will collapse in the end.