Conflict Management
Analysis of Financial Problem for Chinese Small to Medium Sized Companies
Abstract
In the recent years, small to medium sized companies (SMEs) play an important role in most countries over the world. It has been a vital policy issue for governments to deal with these companies to increase development of economy. The financial difficulties faced by SMEs have restricted SMEs’ survival and development. SMEs exist a series of financial problems. This article focus on how to obtain effective financial source and dealing with the difficulties in raising finance for Chinese SMEs.
Key words: Small and medium-sized Companies (SMEs); Financing.
Introduction
SMEs are the necessary power for economy growth. As Beck and Demirguc-Kunt (2005, p2932) said that there was robust partial connection between the importance of SMEs in manufacturing and economic development. According to Ayyagari (2007), formal SMEs contribute to 50% of GDP on average in developing countries and World Bank views SMEs as a core element in developing economy and employment. In China, the number of registered SMEs exceeds 40 million, accounting for more than 99 per cent of enterprises. As a private sector, SME has become a driving force since the economy began to recover in 1978 (Fan, 2007). And it makes up more than 70 percept of the GDP. According to Brookfield, SMEs can be regarded as unquoted small businesses and a medium for self-employment of the owners that are organized by few individuals, typically a family group and act as a medium for self-employment of the owners. In China, the government gives a definition about SMEs in the SME Promotion Law. The scale of production and operation belonging to various forms of ownership are small-and medium-sized enterprises. The main body of this paper is structured into two sections. Section one concentrates on source of finance for SMEs. Section two discusses several key barriers on getting financial support for SMEs.
Source of finance for Chinese
Abstract
In the recent years, small to medium sized companies (SMEs) play an important role in most countries over the world. It has been a vital policy issue for governments to deal with these companies to increase development of economy. The financial difficulties faced by SMEs have restricted SMEs’ survival and development. SMEs exist a series of financial problems. This article focus on how to obtain effective financial source and dealing with the difficulties in raising finance for Chinese SMEs.
Key words: Small and medium-sized Companies (SMEs); Financing.
Introduction
SMEs are the necessary power for economy growth. As Beck and Demirguc-Kunt (2005, p2932) said that there was robust partial connection between the importance of SMEs in manufacturing and economic development. According to Ayyagari (2007), formal SMEs contribute to 50% of GDP on average in developing countries and World Bank views SMEs as a core element in developing economy and employment. In China, the number of registered SMEs exceeds 40 million, accounting for more than 99 per cent of enterprises. As a private sector, SME has become a driving force since the economy began to recover in 1978 (Fan, 2007). And it makes up more than 70 percept of the GDP. According to Brookfield, SMEs can be regarded as unquoted small businesses and a medium for self-employment of the owners that are organized by few individuals, typically a family group and act as a medium for self-employment of the owners. In China, the government gives a definition about SMEs in the SME Promotion Law. The scale of production and operation belonging to various forms of ownership are small-and medium-sized enterprises. The main body of this paper is structured into two sections. Section one concentrates on source of finance for SMEs. Section two discusses several key barriers on getting financial support for SMEs.
Source of finance for Chinese
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