Research On The Legal Regulation Of Financial-holding Company Of The Combination Of Production And Finance In China

Now China is in the transition period and the rapid development of economic promotes the interacted management of China's financial sector to the fast growth. And in that environment which makes China's Financial-holding Company boarded in the stage of financial markets. From the perspective of current legal system, China is still striking to the principle of Separated-operation and Separated-supervision. But from the practical point of view, many businesses have been to the financial markets through equity investments and new-found companies, which have become the combination of a special type of Financial-holding companies. The combination of business and finance aims to integrating industry chain, expanding business, reducing transaction costs and accessing lucrative repayments, which is an ideal model of Financial-holding Company for its parent to engaging in industrial production and diversified financial services. And at the same time it not only can achieve scale economies, but also can disperse the risk which comes from the single financial business service, and improve the ability of resisting the risk of the whole enterprise group. It is also based on the above reason, a large number of China's industrial enterprises have been involved in the financial business and started to realized their ideal scale economies. From the earlier Delong, to the later Hair, Baosteel, CNPC and State Grid, which have rushed into the financial markets to tear their own "financial territory". However, in China's current environment of financial legislation, there isn't any law to regulate the common financial-holding companies, not to mention the Combination of this particular type. Generally speaking, the Combination-based financial-holding company is not only complex in its ownership structure, but its subsidiary's business also often exists mixing and crossing situations. And the whole enterprise groups are vulnerable to the intra-group transactions. The superposition of the problems makes the combined finical-holding companies are walking at the edge of the financial risks.This article is based on the above-mentioned problems, and combined with the lessons that Delong Case brought us, and then deeply reflect about China's legislative loopholes. I do not intend to illustrate the combined financial-holding company which would bring the challenges to the various legal departments at the grand perspective, but start from the instance of Delong's failure and then summarize the shortage of China's legislation. From a legal point of view, studying the combined financial-holding company needs most is to recognize the various legal issues that may arises from it, and then solve these problems in the systematic levels.This article starts from the basic theory about the financial-holding company and the combination of business and finance, and then focuses on the real purpose and practical significance about the combined financial-holding companies. Then, it starts from the legal issues that brought by the combinations, and reveals the lack of financial legislation and the defects of regulations. Finally, the author begins at the inadequacy of China's legislation in the finance, and then puts foreword about the general ideas and methods which can perfect the progress of the combined financial-holding companies.