Electricity Fiscal Development Strategy

The early finance companies of enterprises groups focus on saving and credit, the two traditional businesses, and also involve in less settlement business, in order to improve the fund central management level and financial efficiency of the enterprises groups. However, as the fund management level of the enterprises groups improves, the total decrease of fund inventory and credit demand will restrict the development of saving and credit. This is a serious development bottleneck of finance companies. On the other hand, the development of the groups makes higher demands on the finance companies. Because of this dilemma faced by the finance companies, it is important to research the development rules of the finance companies and find the way to break through the bottleneck for sustainable development.This paper highlights the internal and external factors impacting on the development of China Power Finance Company (CPFC) , puts great emphasis on macroeconomic factors and industry factors. We find that CPFC has a prime advantage in Groups factors which is from the industry and finance combination strategy and overseas development strategy insisted by State Grid (the Group). But the market factor put CPFC at a disadvantage. For example, the severe competitive pressure on finance companies brought by finance market opening, the restrictive and cautious development prospects of finance companies made by industry administrative department, the strict regulation pattern on finance companies formulated by the regulatory commission. At the same time the intra-industry competitors views the finance companies as monopolists. This paper analyzes the internal factors of CPFC development which includes human resources, assessment and incentives system, main business and profitability, the capacity of internal fund consolidation and external financing. CPFC has its advantages and disadvantages on these internal factors.This paper also explores a deep research on the development strategy of CPFC from three aspects. First, from the view of the depended relation between CPFC and the Group, it is the group that is the basis of the existence and development of CPFC. So the strategy of CPFC must depend on the Group, and serve the strategy of the Group. Second, from the view of the development rules, CPFC, which is at the stage from growing to maturity, should choose sound development mode as its short-term strategy, and contract development mode as median-term and long-term strategy. Third, from the view of function, CPFC wants to be a treasurer of the Group in short-term, but in the future, it will be a universal finance server of the Group. Finally, this paper shows the strategy position of CPFC is that CPFC must be a true power finance specialist which depend on the Group, operate soundly and change the mode of development, maximize the profit of the whole Group. The last strategy goal is to turn CPFC into a first-class modernized finance corporation in China with a strong fund service platform, excellent service, assets and performance.