The Research On The Status Quo And Strategy Of Local Chinese Governments Supporting Of Small And Medium-sized Enterprises In Financing

Small and medium-sized enterprises are the most dynamic part ofChina’s economy and they play an irreplaceable role in boosting theeconomic growth, transforming the economic structure, promotingemployment and maintaining the social stability. But small andmedium-sized enterprises are in a weak position in China’s economy.They find it hard to financing and this has become a major bottleneck inrestricting their development. The central government has over the pastfew years issued a series of supporting policies to solve the problemsthese enterprises face when financing and local government also attachimportance to helping them financing. All those supporting measures, tosome extent, eased the difficulties of raising fund for some small andmedium-sized enterprises, but haven’t solved the problem thoroughly atall. The responsibility for the central government is to make macropolicies and some instructing policies, while for local government, theyare implementing these polices as well as exploring for more possible policies that are in line with the state government’s instructions.Therefore, this thesis analysed the statue quo and the strategy ofsupporting small and medium-sized enterprises financing by localgovernment, from the angle of these local government.The thesis researched of local government supporting small andmedium-sized enterprises in financing, through literature research,comparative study, survey and other research methods, used marketfailures, financial repression theory，summarized the research statusincluding domestic and foreign. This thesis defined the concept of smalland medium-sized enterprises and financing, summarized thecharacteristic of China’s small and medium-sized enterprises financing,analysis of the reasons for the difficulty of small and medium-sizedenterprises financing, and demonstrated the essential for localgovernment to support small and medium-sized enterprises financing.The thesis emphasis on the status of local government supporting smalland medium-sized enterprises financing，including supporting policies,take Zhejiang province for example; analysised the practice of supportingsmall and medium-sized enterprises financing by local governments forrecent years, from the angle of direct financing, indirect financing andestablishing local financial organizations to regulate private financing,summarized the achievements. The thesis analysised the problem ofcurrent local government supporting for small and medium-sized enterprises financing policy, such as lack of systematic design, providedsome effective measures in supporting small and medium-sizedenterprises taken by other national government. Finally optimizedrecommendations for local government to support small andmedium-sized enterprises financing, such as making effective policy,improve the supplementary system, and make full use of financial fund.After analysing and demonstrating, the thesis proposed that thereexists limitation of financing supporting policies for small andmedium-sized enterprises made by local government under nowadaysfinancial management system and administrative system, but the modeinnovation can be various. It needs to combine top-level design and localpractice together to solve the problem of financing difficulty of small andmedium-sized enterprises. Administrative policies in financial industryand system design in financial market should have substantial breakthrough on state-level. Local government can use financial fund toestablish funds and attract private flow. The central government and localgovernment should make a joint effort to solve the problem of financingdifficulty of small and medium-sized enterprises efficiently.