The Research Of Relationship Between China's Banking Industry And Financing Of Small And Medium-sized Enterprises

The role of small and medium enterprises in economic occupied an important position.The theoretical learners pay more attention to this problem,but also the financing difficulties of SMEs is the world's a common problem.Beacause SMEs are always established not long, the market-dependent and volatile, short-term capital demand, the lack of foreign financing required for credit record and qualified financial statements, credit guarantee poor, it is difficult for external investors,therefore they rely on the funding of business owners or the accumulation for rolling development.Compared with large enterprises they rely more on endogenous financing.Especially small and medium enterprises in China dependent on debt financing more, which are primarily on loan from banks and other intermediaries, and less on the open market.In view of financing for SMEs is mainly bank loans, then the problem of financing small and medium enterprises can be transformed to a large extent on the problem in getting loans to SMEs.Currently, however,among academic community in proposing solutions for small business loans, most of the view regard small and medium sized banks have willingness and advantagments. But there are scholars believe that small and medium banks on loans to SMEs are no advantage and willingness.This argument, this article that the most important is to determine the existence of small and medium banks is really a good opportunity for SME financing.The current research in this area, mostly from overseas studies, there is no or some combination of China's actual conditions, and studies have mostly focused on one of aspects of SME lending. In addition, China is in a special time at this stage,there are a number of specificity and excessive nature, therefore, purely to discuss the problem from slightly one-sided is noe enough.Therefore, proposed solutions for small and medium enterprises in getting loans are also some one-sided. In China, banks is the dominant position in fiancing maarket.The role of banks in different periods will change, corresponding to the banking industry structure is changing along with economic development, the banking structure also act on the access to credit for SMEs. Therefore, this article pay attention to relationgship of China's banking market structure and financing for SMEs,combined with the characteristics of China's banking market structure, analysis the problem and put forward relevant measures.This paper first analyzes the whole Chinese banking market structure features.The research can be divided into the monopoly of the banking sector, market concentration, product diversification, customer analysis, and other aspects of the structure. Through analysis, this paper reached the following conclusions:1, China's current banking institution is in a monopolistic competition,ever the share of total state-owned banks declined, but its deposits and loans's absolute monopoly role is also very obvious.Moreover, breaking the monopoly is not very easy.2, the market concentration index gradually decreased, but all over 70%.3,due to relatively simple product of domestic banks,so most of the sources of bank profits is from the spreads of savings and loan. At present, because the interest rate is controlled and the restrictions on sub-operators, the Chinese banks'products and services tend to same, very few banks offer unique financial innovative products.4, although the state-owned enterprises had reduced the share of corporate loans, but the state-owned enterprises has been focused on.5,medium and small banks have an irrational tendency to expand, resulting to low levels of competition,quantitative expansion prior to structural optimization.In addition, the article also pointed out that the joint-stock reform of the banking sector has a significant positive impact, helping to form a competitive market,break the monopoly of state-owned banks and lead to a lower degree of industry concentration, change the product uniformity situation.And these factors in turn, will improve the whole industry's performance and structure.The empirical part of the article focus on the relationship of long-term loans by large and medium sized banks as independent variables and small-scale banks, therefore, to see whether there is a relationship between the two variables and what relationship exists.As mentioned above, long-term loans banks invest in state-owned enterprises represent the amount of money and, therefore,it is meaning to study the relationship in order to further analysis of SME lending relationship. In this paper,companyed the characteristics of small and medium enterprises in China,empirical analysis uses state-space models to study medium-small sized banks loans in various stages of economic development in the Chinese banking market structure.Among them, ICBC and China construction Bank are on behalf of large Commercial Bank of China,Bank of Communications represents medium-sized banks.Merchants and deep development are on behalf of Medium-small banks. From the results, large banks have great impact on small and medium banks,owns a positive effect on most of the time, which indicates that large banks influcate small-medium banks'loan flow. The medium-sized banks'impact on small-medium banks are more different, from the 1989-1994 years,the impact is positive,average stability,1994-2001 years, the impact is negative, average stability; 2004-2006, the impact is positive, and increases year by year and the trend to increase is substantial. Overall, from 1989 to 2006 medium-sized banks' impact is positive.