Research On The Liquidity Risks Of Private Enterprises Solved By Bailout Fund

The financing problems of private enterprises in China are prominent.At the same time,many private enterprises blindly borrow and frequently use large-scale equity pledge for diversified expansion,resulting in greater probability of liquidity risks.In 2018,the aggravation of Sino-US trade friction and the tightening of domestic financial regulation led to a sharp drop in China’s stock market,due to the joint action of internal and external factors,the large-scale equity pledge of private enterprises led to a sharp increase of risks.Meanwhile,the deterioration of business conditions accelerated the release of debt risks,and a lot of private enterprises fell into liquidity problems.In order to maintain the stability of the financial market and promote the development of the private economy,the Chinese government and financial institutions have set up bailout funds to deal with the risks of equity pledge.At present,China’s bailout funds have been launched for three years and have been widely used in the rescue of private enterprises with liquidity risks.As the internal and external environment of China’s private economic development is constantly changing,the liquidity risks of private enterprises are still severe.In particular,since the outbreak of COVID-19 in 2020,private enterprises have suffered a severe impact.The bailout fund should also enter a new stage of development,constantly improve the breadth and depth of the bailout,and solve the liquidity risks of private enterprises better.This thesis selects Anhui State-owned Capital bailed out Changxin Technology as a case study.Firstly,this thesis introduces the relevant concepts and theoretical basis in the case,then analyzes the liquidity risks of private enterprises and the operation and development of bailout fund,and summarizes the problems exposed in the practice of the bailout fund in resolving the liquidity risks of private enterprises.Secondly,based on the introductions of rescue process and motivations in the case,this thesis focuses on the analysis of the rescue path of Anhui State-owned Capital for Changxin Technology,and analyzes the rescue effect from the market performance,financial risks and financial performance,and then summarizes the experience of this case.Thirdly,this thesis summarizes the research of this case and puts forward suggestions for the parties involved in the rescue based on the perfect rescue path and good rescue results in this case,so as to provide a reference for the use of bailout fund to more effectively resolve the liquidity risks of private enterprises in the new situation.After research and analysis,this thesis mainly draws three conclusions.Firstly,the source of Changxin’s liquidity risks are high-proportion equity pledge by controlling shareholders,unreasonable financing structure and low corporate governance capability,these problems are universal in private enterprises,but Changxin’s core competitiveness and social benefits are outstanding,business condition is also good,so it is a good target for bailout fund.Secondly,Anhui State-owned Capital assisted Changxin Technology has obtained good result.Although the short-term market performance is negative,the financial risks has decreased significantly,and Changxin’s solvency and growth ability have been significantly improved,indicating that liquidity risks have been effectively resolved and the overall development situation is good.Thirdly,the key to achieve good rescue effect in this case is perfect rescue path.Anhui State-owned Capital rescued Changxin Technology from enhancing financial strength,optimizing corporate governance and implementing strategic coordination,these three dimensions help Changxin Technology achieve a higher level of development.This thesis argues that when the bailout fund rescues private enterprises,it should fully consider the actual situation and interest demands of the parties involved in the rescue,design and implement a perfect rescue path,support the leapfrog development of private enterprises,resolve the liquidity risks of private enterprises from the root,and promote the healthy and stable operation of private economy.