Research On China's Development Finance And Its Reform

Development finance is the profound and advanced form of political finance. Its theoretical base is organizational credit and it is applied mainly through credit construction. Development finance combines the government's organizational advantage as well as the finance's financing advantage. It is significant in improving the domestic mechanism of market economy and achieving the government's strategic goal in a long run. Further, development finance embodies the macro political intention through the direction of project loan, it applies the principle of organizational credit to improve the bottleneck fields of China in order to promote the investing-and-financing mechanism of those fields and also maintain the economic security of China. Thus, a healthy progress of development finance makes a far-reaching impact to the development of China's .economy.This paper starts from the history of China's development finance. And on the basis of the theoretic meaning of development finance, the paper summarizes its characteristics and functions. Then, through comparing with other development finance institutions over the world and making an empirical analysis on China's development finance, this paper finds out the problems that exist in the development finance system. After studying the problems deeply, this paper finally gives the goals, principles and routes of transition, and makes an emphasis on the external environment which transition needs.This paper introduces the formation and evolution of China's development finance from both the micro and the macro aspect. Experience has been extracted from practice serving as the base of future transition and progress of development finance. Then, the theoretical meaning of development finance has been explained in this paper. Because of the existence of market failure, government must intervene the economy to maximize the profit of the entire society. Transition economics analyzes the manner and route which developing countries have taken to transfer from a planned economy to a market oriented economy. It offers the theoretical base for the transition of China's development finance. Organizational credit is the basic theory and function for the application of China's development finance. Systematically researching this theory is useful for the construction of development finance institution and can also remedy the deficiency of markets. Based on the theoretical meaning of development finance, this paper analyzes the function of development finance, defines its pioneer role in economic construction. China's economy is in its transition period in the existence of distorted economic structure and missing markets. These problems can be solved by adjusting the economy by the government. Development finance is the combination of government's purposes and the market's mechanism. Thus, it can be the government's tool in promoting the economy. After the analysis of China's development finance, the paper compares the advance of development finance in other countries all over the world. Through studying the management conception and the operation mode of the top development finance institutes, the paper tries to find the direction of the transition of China' development finance. Development finance is based on the market achievement. Pure evaluation on the utility of society is not suitable for development finance. Actually, the domestic development finance has attained not only excellent profits but also has made significant contributions to the economic development. As for the traits of development finance, the paper explores the achievements attained by China's development finance from both political and commercial aspect. After examining the achievement, the paper analyzes the existent problems of China's development finance. Only through analyzing those problems could we find the route and direction of the progress of development finance. After concluding the successful experience of the operation of development finance in developed countries as well as the current deficiencies of China's development finance, this paper summarizes the goal and principle towards the transition of development finance. Taking China Eximbank as an example, it shows the transition route in detail. Finally, this paper analyzes the necessary external environment for the successful transition of development finance.Through the systematical analysis of China's development finance, the research paper concludes: development finance, as a tool used by government to intervene the economy and maintain the security of the economy, will last in a long run. At the same time, for the need of developing market economy, commercialization is the trend of development finance. This paper proves the positive effect brought by development finance towards the domestic economy development and the enhancement of the integrative national strength. And also, this paper puts forward the goals, principles and routes of the transition.