Financing Difficulties of SMEs in China.doc

Financing Difficulties of SMEs in China Abstract With the constant progress of the society and the rapid development of global economy, the reform and opening up policy of China has provided a good policy platform for the vigorous development of small and medium-sized enterprises (SMEs). And SMEs have become the important force of sustained, rapid and healthy development of Chinas economy. Moreover, SMEs have played an irreplaceable role in promoting Chinas economic development, absorbing?labors and promoting market prosperity. But with the global economic integration, the domestic small and medium-sized enterprise’s operating environment is facing tremendous changes and more intense competition. This paper introduces the importance of SMEs for China’s economic development, describes the source of financing SMEs and analysis of the causes of SMEs’ financing difficulties. Finally, the article takes Zhejiang YiErKe Environmental Equipment Co., LTD successful financing as a case, introduces a new tool of financing called Bridge and Tunnel Mode and discusses the functions of this new tool. The importance of SMEs for economic development in China In China, half of the market economy was dominated by small and medium-sized enterprises. According to the latest statistics, industrial and commercial registration of SMEs in China has breakthrough 1000, 99.8% of the total number of national registered enterprise. Those small and medium-sized enterprises’ industrial output value, sales revenue, pre-tax profits and total exports, respectively, account for 60% ,57%, 40% and 60% of all enterprises. 75% of the urban employment opportunities, 65% of the invention patent and more than 80% of the new product development are provided by those enterprises. They are the main force of pushing forward productivity and technological innovation in the society. The sources of financing SMEs For a long time, financing difficulty has been the bottleneck of restricting the develo