Research On Development Trends For China's Factoring Industry

With the strengthening trend of economic globalization, the relationship between China's economy and world economy becomes more and more tight. China plays more and more important role in world economic stage, with the effective stipulating fiscal policies of expansion of internal demand and export demand, which bring forth to the high and steady growth rate of GDP in recent years. The gradually formed world buyer markets bring Chinese enterprises with both huge opportunities and severe challenges. The competence consists of products and services quality, the trade terms and payment terms.To win the competence in market area, many enterprises sell products or render services on credit sales, together with preferential payment terms. Factoring, as a newly emerged financial product combined with finance, credit risk cover, business investigation, and account receivable management and collection, come into being. In recent years, factoring keeps relatively steady growth in development countries, U.S., G.B., Italy, etc, while share the high rise in the emerging market such as Eastern Europe, Eastern Pacific Area. Say, statistics from FCI ( Factors Chain International ) shows a world factoring turnover of 760 billion US dollars fulfilled in 2004. My research focus on the current status and development trends of China's factoring industry, the related factoring techniques, with time span from 1999 to 2003. My aim is exploring to set up a theoretical basis and framework for the development of China's factoring industry, so as to support China's trade and financial practice, to give suggestive guidelines and references for government financial supervision authorities.As to methodologies and analytical tools, I use the qualitative approaches concerning with microeconomics, financial economics, industry organizations, to demonstrate the economics meaning for theoretical basis and framework of factoring; to analyze the determinants of factoring pricing with the strategies of Price Fixed and Competence Fixed; to analyze the determinants of development level for China's factoring industry with econometrics tools, and give the preliminary data model for estimation. International comparative analysis is an important approach in making horizontal differential analysis among different regions and countries. Finally, I come to the conclusion of the future application of factoring in China's SME development, that factoring is designated to be an important external financing source in the coming future.