Research In SME Financing In China

The slowdown of GDP growth since the Financial Crisis of 2008 is causing increasing worries about the economy losing momentum and the country being trapped at a middle-income level of development in China. Given the already wide excess capacity and low efficiency problems in traditional industries and large state-owned enterprises, to fully bring out the dynamics of the numerous small and medium enterprises in the country in order to create new sources of growth has been rapidly gaining academic as well as policy importance nowadays. However, despite the increasingly recognized role of SEMs in driving forward the growth, increasing employment and boosting innovation, the external financing environment for them has remained largely unsupportive. Because of the inherent information asymmetry as well as the structural problem of the Chinese financial system, the SME financing problem has been particularly severe in China, especially in Chinese county economies. By conducting a thorough and comprehensive survey on the SME financing conditions in the city of Ruichang, Jiangxi Province, this paper aims to reveal a general situation confronted by SMEs in terms of financing in China and provoke some thinking on improving it.The paper is structured as follows:chapter two gives brief introduction to SME development and the capital market in Ruichang, Jiangxi; chapter three presents the questionnaire survey delivered to find out the financing problems encountered by SMEs in Ruichang; chapter four revolves around an interview with the dean of credit department of the rural credit cooperative of Ruichang; based on analysis of the survey and interview results, chapter provides a discussion of the paper’s main findings and gives suggestions on SME financing environment amelioration; chapter six concludes.