Research On Development Routine Of Credit Service Industry In S&M Cities

A modern market economy is a credit economy based on a legal system; a highly developed credit system plays an active role in mitigating financial risks and improving market resource allocating efficiency. Along with the implementation of the reform and opening-up policy and the development of social market economy, the ownership structure is more diversified, the market orientation is more intensified, and the market scale is more enlarged in China. The market mechanism has been becoming the fundamental mechanism for national economy operation in China. The credit relationship has been becoming an important role to maintain the market system composed of different entities, the demand on credit system in the whole society is strongly increased. Due to the special development process of China, a less-developed credit system has become a bottleneck to constrain the sustainable and healthy development of economy and to constrain the development of social market economy. Every aspect of the society reacts strongly to the phenomenon of discredit and disorder. The appeal for accelerating the construction of social credit system is increasingly urgent.As a basic part of social credit system, the development of credit service industry and the specialized and regularized service provided by credit agencies have been an indispensable component of the market economy, which can effectively reduce the existence of discreditors. In some developed countries it has been formed a relatively comprehensive credit system and credit monitoring legal system after more than 160 years'development. It has been formed a completed credit service industry chain, in which the market entities are matured, the supervision authorities are designated, the industry associations are effective, the supply and demand of credit products are strong. Meanwhile, the development of traditional credit management theory and modern economic theory also provide the important theoretical support to the occurrence and development of modern credit service industry.In China, even after more than 10-year development, the credit service industry is still a new industry. Currently the credit agencies are developed to a certain scale. The social credit risks evaluation and disclosing system has been primarily built up, and begins to increasingly impact economic operation in regard of mitigating credit risks. But influenced by many factors, such as the short history of this industry, the recognition of credit in business fields, the market scale, the less matured credit management system and legal system, etc, in China the credit agencies still have a long way to go to play a more powerful and influential role in the market system. Most of them are still very small and not regularized very well. The credit evaluation service has no been recognized as an independent and authoritative role in the market. In addition, what the governments especially the local governments should do to promote the credit service industry, still is a controversial issue both in the theory and practice. Up to now, there are many researches on credit management theory and application in China. But most of them are simply the introduction of western credit management theory, or solely focused on China's modern credit service system and industry. Only a small number of these researches are focused on how to combine the western credit management theory with China's social and economic reality together. Rare researches are aimed at that how a small and medium city like Changzhou to develop modern credit service industry. There are also few researches about the connotation and denotation of credit service industry chain.This study analyzes and summarizes the development process of credit service industry in cities of developed countries with the consideration and comparison of Changzhou's social and economic reality. It implements the modern economic theories such as Asymmetric Information theory, Transaction Cost Theory and Game Theory to analyze the basis of the occurrence and development of modern credit service industry. It analyzes the motive of the developing mode of"connection and extension"in Changzhou modern credit service industry chain, and based on this analysis to propose the optional structural type of Changzhou modern credit service industry chain. In addition, it implements SWOT method to analyze the actual development of Changzhou modern credit service industry in order to find out the strength, weakness, opportunity and threats, and to develop the strategy matrix for developing modern credit service industry in small and medium cities. According to the theoretical and practical analysis, it proposes the routine option and policy solution for Changzhou to develop modern credit service industry, especially focuses on what the government's position is in promoting the credit industry development. Changzhou is a typical S&M city in China; the research of development routine of credit service industry is not only meaningful for Changzhou but also has a typical meaning for other S&M cities of China.