Study On The Current Financing Issues Of China’s Privately-Owned SMEs

Since the reform and opening up, private economy with rapid development hasgradually become an important foundation in China’s socialist market economy.Privately-owned small and medium-sized enterprises (SMEs) have not only effectivelyactivated market competition, but also promoted the sustained and stable growth ofChina’s economy, creating numerous job opportunities and effectively easing theemployment pressure in China. What’s more, the privately-owned SMEs during themanagement process have stronger profit motivation and more urgent sense of marketcrisis. Coupled with high degree of autonomy, these enterprises spare no expense to bringin foreign advanced technology and equipments and hire well-paid talents, graduallybecoming a new force for technological innovation. However, China’s privately-ownedSMEs are constrained by various factors, among which financing issues are the mostserious and have become the biggest bottleneck restricting the further development ofthese enterprises. This paper mainly makes a summary and further study this issue indepth on the basis of plenty of document materials. First is to illustrate related theories ofMarxism and Western Economics connected to financing issues, and ascertain the rangeof privately-owned SMEs. Then on this range analyses the financing methods and statusquo of China’s privately-owned SMEs at current stage, and go deep into the analysis ofthe existing problems to find out the causes. The specific factors can be divided into twosides: the internal and the external. The internal side is to find their own reasons of thegovernment, the financial system and the enterprises, then to probe into key solutions tosolve the financing problems of privately-owned SMEs from different angles. Alsospecify the approaches of practice to the current measures and specific rules in theory, and pertinently put forward countermeasures to solve the financing problems: startingfrom the concept of ownership, call on the government to take its responsibility, innovatethe ownership concepts and eliminate all the social discrimination againstprivately-owned SMEs; call on the government to perform its functions, effectively servethese enterprises; urge the government to improve those laws and regulations that do notmeet the characteristics of the market economy as soon as possible and accelerate theconstruction of appropriate legal systems; the reform of financial system should focus oncredit market and lend flexibly; meanwhile draw lessons from the capital market’soperating procedures in developed countries, such as stocks, bonds, venture investmentand lease; expand the financing channels for privately-owned SMEs, pay attention to therole of private lending and borrowing and positively guide them to achieve flow of fundsin multiple ways; encourage the enterprises to strive to meet the requirements of modernmarket while seeking funds for themselves, enhance their reputation and establishenterprise consortia and so on. In a word, this paper with pragmatic attitude studiesrelative details based on the reality, and tries to solve the financing issues through variouspossible means for privately-owned SMEs. Never give up and endeavor to lead theseenterprises into a road of virtuous development.