Effective Government Intervention in Establishing Optimal Financing Frame for Transnational Operation of Private Enterprises

Bin Huang

doi:10.5539/ijbm.v3n9p31

Abstract

A government’s financing policies are essential to its private enterprises’ transnational operation and development. Many foreign governments have attached much importance to their private enterprises and supported them by formulating a series of preferential financing policies and providing corresponding conditions for them. In this paper, Chinese private enterprises’ financing statuses in domestic and international markets are analyzed, in order to increase the financing strength for the transnational operation of Chinese private enterprises from the view of emphasizing government support.

Highlights

Financing concept needs improvementDuring their transnational operation in western countries, Chinese private enterprises encounter many obstacles in the transnational flow of production factors such as technology, capital and talents, and so on
A government’s financing policies are essential to its private enterprises’ transnational operation and development
Difficulties in the financing of private enterprises are resulted from narrow financing channels, but they are caused by inappropriate systems

Summary

Financing concept needs improvement

During their transnational operation in western countries, Chinese private enterprises encounter many obstacles in the transnational flow of production factors such as technology, capital and talents, and so on. 2.2 The government should implement preferential financial policies as soon as possible It should conduct active intervention in state-owned large-scale commercial banks, and encourage Chinese-funded banks to carry out transnational operation and to cooperate with Chinese private enterprises to jointly enter international market. California founded its export credit guarantee system 12 years ago, aiming to help local small enterprises to expand export volume It adopts government financial support and the cooperation with cooperative banks to share the loan risks of banks, so that banks will pay attention to both the cash flow and the future revenue of small enterprises, which enables small enterprises to become stable client of banks. 2.3 Using multiple financing modes to realize optimal financing for transnational operation of private enterprises

Short-term financing

Middle and long-term financing

Financing leasing

Overseas financing and listing and direct financing

Conclusion