The Effect Of New Regulations For Capital Management On The Optimization Of Enterprise Capital Structure

As of 2017,more than 100 billion yuan of assets management products of financial institutions have been circulated in the capital market.Such a large scale of 10 billion-grade capital management is one of the important sources of enterprise financing,and plays a decisive role in the whole capital market and economic system.However,due to the fact that the risk prevention measures of the legal and regulatory departments have not kept pace with the development of the capital market,the development and expansion of asset management business has produced many "grey zones" under the vigorous capital growth situation,which has brought huge potential crises to the economic development.In order to reduce the overall debt level of the society and control risks,the China Banking and Insurance Regulatory Commission,the People’s Bank of China,the State Administration of Foreign Exchange and the China Securities Regulatory Commission jointly issued the Guiding Opinions on Regulating the Asset Management Business of Financial Institutions(hereinafter referred to as the "New Regulations on Asset Management")in 2017.At the same time,construction enterprises are capital-intensive enterprises,and the shortage of funds has been the biggest problem perplexing construction enterprises.At present,China’s construction industry reflects the characteristics of single financing mode,high level of asset-liability ratio and strong dependence on financing of financial institutions.The new asset regulation not only regulates the asset management business of financial institutions,but also promotes the process of enterprise de-leverage,and refines the rules of credit financing,which makes the threshold of enterprise in credit financing significantly increased.In addition,the contraction of credit market has caused the shrinkage of enterprise financing market,which has a great impact on the capital structure of construction enterprises,and highlights the difficulties of financing construction enterprises.Problem.According to the risk preference of the market,after the new regulations,the credit of financial institutions is more inclined to state-owned enterprises with good reputation and strong strength,and the financing difficulties of private enterprises are further increased.Faced with the sudden decline of financial institutions lending to private enterprises,the situation of capital shortage and financing difficulties of private construction enterprises will be extremely severe,affecting the capital structure of enterprises.Therefore,private construction enterprises need to adjust and improve their internal capital structure to deal with the new regulations.This paper regards the research results of capital structure theory as the theoretical basis of this paper.Taking the private construction enterprise Oriental Garden as an example,this paper compares the data of financing sources,debt ratio,debt structure,financial leverage effect and asset quality in the capital structure of Oriental Garden before and after the introduction of the new regulations,and concludes that the new regulations have brought financing channels to the capital structure of Oriental Garden.The impact of road contraction,increased difficulty in financing,limited leverage utility,increased shortage of funds and increased financial risks.In view of these impacts,it is concluded that oriental gardens can cope with the new regulations from the following aspects: broadening the financing channels,improving the efficiency of capital use and preventing financial risks,and then put forward reasonable capital structure optimization suggestions to achieve the effect of enhancing the value of enterprises.As the new regulations are the latest policies in China,it is a new attempt and challenge for China’s capital market.There are still many uncertainties in the impact of the new policies.It will take time for private construction enterprises to adapt to the impact of the new regulations by adjusting their capital structure.During this period,many problems will arise.In addition,the literature review and reading of the new regulations and capital structure found that there are few studies on the new regulations in the existing literature.Among them,only a few news reports have explored the impact of the new regulations on the capital structure of private construction enterprises,or some financial reports have analyzed how private construction enterprises should adjust the new regulations.Based on the case that no private construction enterprises should make capital structure optimization adjustment in response to the new capital management regulations.This paper will start with the impact of the new regulations on the capital structure of oriental gardens of private construction enterprises.Finally,aiming at the impact of the new regulations on the capital structure,the paper puts forward some suggestions on the optimization and adjustment of the capital structure,which can be used as a reference for other private construction enterprises to make capital structure optimization in response to the new regulations.