Studies On The Positive Interaction Between Private Small & Medium-sized Enterprises And Private Small & Medium-Sized Banks

Since the reform and opening up and together with the increasingly deepening of reform on economic system, the economic strength of China has been all-time prosperous with a higher and higher marketing level. The material industry has witnessed a thorough reform especially, and the reform on planned economy has given birth to lots of private enterprises which are of fresh vigor and thus improve greatly the state economy forward. These private enterprises become a significant part of the state economy, they play import role in solving employment problem, making the market more completive as well as more prosperous, optimizing the industry structure and etc. However, the further development of private enterprises is always blocked by financing, and the financial support they have obtained is extremely unequal to the contribution they have made to the state economy. Therefore, it is a critical task for economic structure reform in China to solve the financing, especially indirect financing, that private enterprises are confronted with.At the same time, financial system in China is also experiencing reform. However, the actual degree to which the reform is conducted is much less than that to which the reform in material industry has happened. The market share and monopolization of state-owned banks are still extremely high without any tendency to decline. Supervision on finance the state conducts as well as the special role that government plays in state-owned banks fosters phenomenon other than market management in bank service industry. In this sense, to both realize the market operation in bank industry and solve the financing problem that boxes up small & medium-sized private enterprises is extremely significant to economy development, reform in economic system and reform in financial system in sense of both theory and reality.The first part of the thesis gives a clean outline of the subject that the thesis aims at; it gives a definition on small & medium-sized private enterprises; it also, via taking into the difference between small & medium-sized private enterprises in China and those in rest world, defines what is small & medium-sized private company in China with detailed indexes; finally, it comes to the importance and contribution that small & medium-sized private enterprises hold in our state economy. The second part gives an analysis of the present financing conditions of small & medium-sized private enterprises in China, including all kinds of financing approaches, the problems existed, the profound reasons of these problems, and the barrier in finance market. It then, via resorting to the theory of financing order, figures out that the first problem to deal with in solving financing problem is indirect financing or bank credit.The third part comes to the second researching subject of the thesis via defining what small & medium-sized private bank is. It is very hard to basically and completely solve the financing problem that small & medium-sized private banks are facing within the present financial system. To solve this problem thoroughly, permitting the small & medium-sized in the financial system is a must.The forth part gives attention to both the financing problem of private enterprises and the present problems of bank industry in China; it analyzes the reality to realize the positive interaction between private enterprises and financial system; it, applying the theory of Market Segmentation, expounds the possibility to provide bank service for small & medium-sized private enterprises by small & medium-sized private banks; and lastly, it analyzes the association between small & medium-sized private banks between small & medium-sized via empirical study.The fifth part, via the cases of Zhejiang Tailong Commercial Bank and Taizhou Commercial Bank, elaborates on the integration between small & medium-sized private enterprises and small & medium-sized private banks as well as the possible positive interaction between them.The sixth part, via establishing message delivery model and reputation model, demonstrates the approaches to realize positive interaction between private enterprises and banks; it also concludes that relation-based loan can solve the problem of information asymmetry, and that the integration of industry with finance (IIF) is an issue that determines the deepening of relation-based loan and can better solve the financing problem boxing small & medium-sized private enterprises as well as better develop small-sized & medium-sized private banks.Based on the analysis of a series of feasibility studies,we can draw a conclusion that we must first solve the problem of its direct financing in order to solve the financing problem of the private small & medium-sized private enterprises. Only the introduction of the private small & medium-sized banks and the establishment of the positive interaction between industry and financial can we solve this problem, which will also help to promote the reform of the financial system and to raise the level of the banking market.