PRC中小企业融资问题研究-毕业论文外文翻译.docx

International Business and Management, 2015, 10(2):69 -74. Research on financing of SMEs in PRCsunhuiJilin UniversityAbstract With the rapid development of economy, middle and small-sized enterprises are playing a more and more important role in market economic and become an important part of national economy in our country which is also an active strength in the market. However, the manage environment of middle and small-sized enterprises is not very favorable, specially the problem of financing. The problem of fund shortage is becoming the most serious problem which restricts the development or even threats the survival of middle and small-sized enterprises. This essay is going to analysis the finance theory according to different sizes of business, the financing channels and the present situation of our country small and medium-sized enterprises. It will also start from three aspects which are the policy environment, social and bank and the weakness of middle and small-sized enterprises themselves. In order to find the reason for financing difficulties, it will study the finical system, the credit guarantee system, the information symmetry and the cost of financing, etc. The aim of this essay is to put forward some improvement measures and countermeasures according to the reasons discussed above. Nowadays, our country is in the high-speed economic development stage, if we can not find a better way to deal with small and medium-sized enterprise financing problems, there will have severe negative impact on the economy development in our country. So researching on the problems of small and medium-sized enterprise financing difficulties and finding the solution has practical significance. Key words: Medium-sized and small enterprises; Financing; Bank; Self-construction.Key words: Medium-sized and small enterprises; Financing; Bank; Self-construction1.SMES AND ENTERPRISE FINANCING1.1The Definition of SMEsSMEs mean the companies those who do not have large paid-up capital and also do not hire lots of employees. The United States issued “small enterprises” in regulation: “all owned and operated independently, enterprises are not dominant in an industry that belongs to small businesses.” PRCs national bureau of statistics, ministry of industry and information technology, the national development and reform commission and the ministry of finance jointly issued SMEs type standard notice on June 18, 2011.The notice has been clear that SMEs are divided into three typesmedium, small and micro, according to specific standard enterprise employees, operation income, total assets etc, combining with the characteristics of industry to identify.1.2The Enterprise Financing1.2.1 The Relative Concepts of Enterprise FinancingEnterprise financing refers to the enterprises as the main body in financing activities, effectively raise money through certain financing channels for basic daily activities, according to the requirement of their own. Financing is the first task of enterprise financial management. Whether in the early stage of a new company setting up or in the developing and expanding period of a company, financing problem runs through all the stages. Financing means collect fund directly or indirectly according to the supply and demand in the capital market. Generally, financing refers to a kind of economic behavior that funds flow in the capital market to alleviate the financial stress. Its an interactive process, including input and output of funds. When a certain amount of capital is injected into the corporation, the management will make full use of it. That process make a perfect circle in capital flowing. Normally, enterprise financing can be divided into two common ways: endogenous financing and external financing according to the source of funds. Especially, exogenous financing can be divided into direct financing and indirect financing.1.2.2 Related Theories of Enterprise Financing(1) MM theory. In 1958, Modigliai and Miller put forward in the famous “MM theory” in their classical paper “the cost of capital, corporate finance and investment theory” (Shi, 2001)：Assuming that there is a complete capital market that does not need to pay corporate income tax, the management risks of the enterprise in the market are all the same, only with the difference of capital structure. There arent inevitable relations between the enterprises capital structure and enterprises market value.(2) Balance theory. In the mid-1970s, Myers, Bradley, Frank, and Goyal pointed out the theory of static balance and dynamic balance theory by a lot of research. Simply, the value of the enterprise will not increase as creditors rights financing unlimitedly (Chai, 2011). Because the risks and expenses the enterprises taking are rising as the proportion of debt financing of enterprises rising ceaselessly. The risk of bankruptcy will continue to increase, as well. The income from bonds will be lower than expected. In the meanwhile, the cost of debt issuance and the difficulty of release will increase, so that it will lead to a drop in the length of the value. So the best capital structure in enterprises should take a balance between debt and cost.(3) Agency cost theory. Jensen and Mecking, the founder of Agency cost theory, think there are serious enterprise interest disputes in the process of development, which mainly reflect in the disputes between the agent and the principal. For the detailed points are the interest disputes between the owner and the management and the interest disputes between the owner and the creditor. The interest disputes cause the equity agency costs and debtagency costs.(4) Financing order. Mayers thinks when comprehensively considering transaction cost of various financing methods, ordering in accordance with the cost, corporations always prefer to giving priority to financing transaction with lower cost in 1984. Enterprise usually takes advantage of endogenous financing with the profit achieved by depreciation and expenses saved. The benefit is very obvious. This kind of financing method has no transaction cost. However, it may lead to bad consequences, such as the leak of significant information. That is actually not confidential. More seriously, it runs risks in the ownership of the enterprise. Thus, whendeciding which financing method to adopt the corporation should take a deep consideration in the balance of the benefits that will achieve between ownership and profits.2.PRCS SMES PRESENT SITUATION2.1THE SOURCE OF PRCS SMES PRCPRCs SMEs as a kind of specific financing group have the following characteristics:2.1.1Initially Rely on Internal FinanceWith the deepening of the reform and opening up in the 1970 s, more and more SMEs begin to set up. The development history of SMEs in our country is really short so that the enterprises are lack of reliable credit records and are not always faithfulness and accuracy of financial statements. SMEs credit guarantee ability is not good enough, so that it has some difficulty to get the trust of the external investors, banks and other financial institutions. So the owners of SMEs can only rely on endogenous financing including their own capital and profits, and sometimes exogenous financing including funding from a small number of friends and relatives, also from some angel investors, investment and very few other informal channels.2.1.2Support from the State Financial CapitalIn 2009, the central government provided 9.6 billion yuan for the development of SMEs in our country, and invested 20 billion yuan for SMEs technical renovation and allocated 3 billion yuan funds to SMEs for the improvement of the science and technology of SMEs. With the further development of market economy in our country, the state financial support proportion in the enterprise gradually reduce in its own funds, but the national finance funds for SMEs is still presenting one of the most important aspects in SMEs financing channels.(1) Bank financing. For most enterprises, bank financing is one of the most wide and basic source of funds, especially for SMEs. Without the funds from the banks, they may go into liquidation and fall through. Its one of the most vital methods in SMEs Financing.(2) Non-bank financial institutions financing. Enterprises borrow money to sustain and accelerate the development of current position through the non-bank financial institutions such as the trust and investment companies, securities companies, insurance companies, leasing companies. Even though the loan from these financial institutions is smaller than that from the bank, delightedly the use of the capital is more flexible. In this case, non-bank financial institutions financing from these financial institutions has been wellreceived by many SMEs.(3) Free funds from residents. With the development of economy, residents have some idea about financial knowledge, coupled with rising inflation in China in recent years. In the other side, the bank deposit rate decreasing constantly, more and more residents prefer to purchase enterprise bonds instead of depositing the money in the bank.2.2Chinese SMEs Financing Present Situation AnalysisMain problems discovered in PRCs SMEs financing at present are as follows. The first is that the financing channels are too narrow, including narrow direct financing channel and less indirect financing credit support. The second is that financing cost is too high.2.2.1The Financing Channels Are Too NarrowBecause of historical reasons, the threshold of China listed companies is relatively high. And Government supervision of listed companies is very strict. Adding to incomplete venture capital system, it is difficult for SMEs to raise funds through capital market publicly. According to the statistics announced by Peoples Bank of China in August 2003, 98.7 percent of PRCs SMEs financing source is from bank loans. Direct financing to SMEs accounted for only 1.3 percent of corporate finance. Since China venture capital system is not perfect, but also lack of a more complete legal regulations and support policies, which makes it difficult to get financial support for SMEs through equity financing, results in the majority of SMEs in face of a shortage of liquidity and large-scale investment projects when the first thought to receive financial support through bank loans. But many restrictive conditions for bank loans make companies cannot obtain financing support timely and fully. Monetary tightening in recent years makes SME financing even worse.2.2.2The Financing Cost Is Too HighThe cost of corporate financing includes financing cost and interest expense. Due to the characteristics of present PRCs SMEs information opacity, low mortgage prices, complex security procedures and high expenses, the SMEs cannot get the equal treatment as state-owned enterprises. Conversely the SMEs need to spend more than the state-owned enterprises on floating interests and guarantee fees. Adding to cumbersome procedures and high cost, all make many SMEs turn to private lending. With the national controls on bank lending increasingly stringent, private lending interest rates continue to rise, based on the principle of supply and demand. According to the data of Wenzhou statistical bureau in 2011, the ROI of local SMEs has fallen to 1% to 3% versus 8% to 10% a few years ago. However, the interest rate of private lending in Wenzhou in 2011 had risen to 72% to 96%. Some higher rate even reached 240%. More seriously, most businesses are unable to pay off the interest of loans.3.THE REASONS FOR PRCS SMES FINANCING DIFFICULTIES3.1External Factors3.1.1The Policy Environment and Social Reasons(1) Imperfect laws, inadequate government support. A healthy legal environment plays an important role in enterprises survival and development. However, at present our country has not issued a comprehensive laws and regulations about SMEs financing. The regulation of “SMEs promotion law” is too general, lack of specificity and difficult in implementing. Government policy towards SMEs just floating on the surface, it hasnt done specific research on the reality of the situation of SMEs. Government should establish SME development institutions, which should set up detailed plans on how to develop, and how to solve the financing difficulties of SMEs through government support system. While the central government will allocate funds to SMEs annually, but considering the pace of development of SMEs in these funds for SMEs is inadequate and unbalanced regional development, local financial subsidies cannot take into account all SMEs. Local fiscal subsidies given to the SMEs, basically only those with good prospects for development or having been valued by the local government can obtain special funds from the government.(2) Imperfect credit guarantee system of SMEs. Guarantee companies provide third party guarantee for SMEs, and enable the enterprises to obtain appropriate funds from banks and other financial institutions. The third party guarantee financing provides lots of convenience for SMEs. At present the credit guarantee institutions in China appear two extremes: too commercial and lack of commercial affected by planned economy.(3) Imperfect capital market and private capital development. From a long-term point of view, capital market is the main field of SMEs financing resource in the future. Equity financing and debt financing are two main kinds of capital market financing. According to relevant laws and regulations, total share capital of a listed company shall not be less than 3000 yuan. But majority of SMEs in our country cannot meet this requirement, and thus unable to obtain financing through the stock market. Fortunately, the private capital is not very strict for SMEs financing. The procedure is simple, convenient and efficient. But at present our country has not yet admitted the legal status of private lending. Private lending cannot survive as indirect financing way of enterprises. And in some parts, the interest rates of private lending are too high so that the companies cannot burden.3.1.2Resistance from Banks(1) Different treatments for SMEs. Along with our country economic system in the process of the planned economy to market economy, the original ownership of inertial thinking hasnt caught up with the change of the economic system development which lead to bank have ownership “discrimination” when considering to lend loans to enterprises.(2) The defect of the enterprise credit evaluation mechanism in bank. Banks usually take enterprise credit rating before providing loans to SMEs. At present manycommercial banks in China have not set up special SMEs credit evaluation system.(3) Information asymmetry between banks and SMEs. There are a lot of problems between SMEs financial system and governance structure. Operatin