Study On Small And Medium-sized Enterprises Financing Under Financial Deepening Condition In China

The Small and Medium-Sized Enterprises(SMEs) developed very fast since this century, and they play an important role in our economy development and society stabilization. Since then, the number of SMEs in china has been to over forty two million, which is account for 99.8% of the number of our Enterprises. The values they have made have counted for 58% of GDP, 59% for sales, 50% for taxes, and 80% of the employment. But, in an unperfected market, The SMEs in china have been faced with lots of difficulties in finance.In order to resolve this problem, lots of scholars have studied the reasons and gave a lot of suggestions. They summarize the reasons from the economic systems, government, financial institution, and The SMEs itself. However, I think they are not the key reasons.I make a systematic research in SMEs in our country, and believe that solving this problem is a systematic project and a long process.I analyze the environment of the financing of The SMEs, indicate that financial repression is the essential reasons for the problem. And then, I point out that to eliminate the financial repression, financial deepening is needed.The innovation of this article is that I can combine the Ronald McKinnon and Edward Shaw's theory with our reality to analyze the reasons of this problem, and try to find out the means of resolve this problem in a financial deepening way.The content of this article is as follows:In chapter one, firstly, I use the theory about the financial repression and financial deepening to analyze the financial repression phenomena in china, the influence of financial repression and financial deepening on finance of the SMEs. Secondly, I retrospect the process of the financial deepening in china. Before reform, the character of our economies was too much relying on finance and People's Bank of China; after reform, though we got some achievements in financial deepening, the financial repression still influences the SMEs.In chapter two, firstly, we give the definition of the SMEs. Secondly, we analyze the role which SMEs played in china, and we pointed out it is an absolutely necessary part in our economy. Thirdly, we put forward the financing actuality, that is, it is still difficult for the SMEs to finance in china.In chapter three, on one side, we use information asymmetry theory, risk and cost theory, and ownership discrimination theory to analyze why this difficulty exists in china. On the other side, we explain it in a practice aspect. The reasons are as follows:Firstly, the system is unperfected and low efficiency. Secondly, the capital market is lack of arrangements. Thirdly, folk capital is difficult to enter the bank system. Fourth, the system of assurance is morbidity. Fifth, there are some problems in the SMEs itself.So, I think, to resolve the difficulty in financing, the most important thing is to eliminate the financial repression.In Chapter four, we compare the difference of finance between financial repression and financial deepening condition. I believe that under financial repression, The SMEs have to choose ontogenesis'finance and be charged with high cost. On the contrary, in financial deepening, The SMEs have many ways to get money and choose the best way for itself. So, the government's responsibility is to improve the financing environment. For example, firstly, it can make the environment more perfect; secondly, reform the financial system; thirdly, expand the channel of finance.According to the analysis of the finance environment of the SMEs, This whole article gives the reasons why it is difficult for the SMEs to finance, and point out that financial repression results in the difficulty radically. So, financial deepening is the radical way to resolve this problem, which is still a long way to go.