A Research On The Financial Support Of Wanjiang Cities

Industrial transfer occurs when enterprises transfer their production line partly orentirely from one location to another. While China is actively transforming theassignment of international roles and various domestic industrial zones are workingtowards the optimization of industrial structure, industrial transfer is beingimplemented on a large scale in many areas in China. In2009, Wanjiang industrialtransfer demonstration plot, the first domestic demonstration plot for industrialtransfer was founded. It demonstrated the government’s intention to reform andexplore in the area of industrial transfer. In recent years, Anhui Province hasaccelerated its economic growth through a myriad of channels. One of the mostimportant strategies is to undertake industrial transfer. The essence of industrialtransfer is capital transfer. Robust financial support is key to the success of capitaltransfer. In view that the financial development of Anhui is still lagging behind that ofthe eastern coastal areas, it makes profound influence on the financial growth ofAnhui to answer questions like how to tap on the limited financial resources andattract external financial resources to provide effective and sustainable financialsupport for undertaking industrial transfer.This study consists of five parts. Part1introduces the relevant concepts ofindustrial transfer. Literature reviews are also presented on the financial support forindustrial transfer in both China and overseas. Part2analyzes from the theoreticalperspective the function mechanism of financial support in industrial transfer. In acertain hypothetical condition, a middle economic model is constructed whichcomprises economic zones with high and low gradients, financial service departmentand industrial production department. A study is also done on the break and recoveryof equilibrium in capital flow. Eventually, the function of financial support inindustrial transfer is concluded to be1. to push the transfer of traditional industriesfrom high gradient zones to low gradient zones;2. to pull the upgrade of industrialstructure in low gradient zones;3. to provide lubricating effect in the process ofindustrial transfer. Part3presents case studies on the financial support for industrialtransfer to Wanjiang cities. Thorough analysis is done on the economic statistics ofthe8members in Wanjiang city belt. The level of contribution of each city toindustrial gross product is evaluated in aspects like direct financing, indirect financingand financial support. Based on the analysis, problems and challenges faced by Wanjiang city belt in the financial support for undertaking industrial transfer are listedas well. Part4takes into consideration the actual situation of Wanjiang city belt,draws experience from the success of Pearl River Delta and Changjiang River Deltaand makes the following recommendations:1. to reduce the gap in financialdevelopment among the members in Wanjiang city belt and achieve rationalallocation of investment resources;2. to strengthen the channel of direct financing andimprove the proportion of direct financing;3. to stimulate financial investment andpromote the innovation and experience sharing;4. to encourage financialcollaboration with external parties and break the barriers that hinder capital flowsacross the regions.Part5presents the conclusions.