A Study Of Financing Problems Of Chinese Small And Medium-Sized Companies In International Trade

With the arrangement of China’s macro-strategy, the internationalization of RMB and the deepening of reform, China’s international trade has been growing fast. In the year 2014, the central government set the idea of organizing an open economic system aiming to face with China’s stage feature as opening doors to the outside, which raised up foreign trade companies’enthusiasm a lot. However, as the international trade is getting active, the need of financing of trade companies will continuously expand. At the same time, the marketization of interest rate and the relaxation of bank access permission restriction have brought huge pressure to the banks. The reducing of interest spread between deposit and loan forces most banks to pay their attention to the intermediate business income. International trade financing started late in China and its characteristics are just in line with commercial banks’requests, like owning a relatively bigger room for profit growing and being able to avoid risks because of self-liquidating. So, international trade financing service has become a key business of banks since recent years. Even so, it is still very hard for small and medium-sized companies, which contributes 60% of total trade amount, to gain financial support from banks. What the banks should do to help small and medium-sized companies to get access to financial support is the main point covered in the article.Firstly, proceeding from the facts, the article analyzed the current situation of financial support for small and medium-sized trade companies and the development of banks’ international trade financing service. Then, the article analyzed the existing problems of banks’international trade financing service from 3 aspects which included system mechanism, service design and risk control. What’s more, the article also discussed the reason why structural problems still occur when the service is needed by both banks and companies. Finally, as for the problems, the article came up with measures and suggestions.The main conclusion:on one hand, international trade finance will be one of the breakthrough point for commercial banks and small and medium-sized foreign trade companies are the clients who owns greatest potential. Commercial banks should learn from foreign banks’ experiences and change traditional bank credit philosophy to design financial products according to trade companies’needs. On the other hand, commercial banks should strengthen the cultivation of comprehensive talents, the information sharing and the cooperation with the third part platform so as to gain market competitive advantage. At last, a thorough credit system can not only decline bank credit risks, but also reduces the negative effects of information asymmetry.