...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...
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...Chinese company go public on the US. EXECUTIVE SUMMARY In these years, many Chinese companies go public in the United States. There are more than 200 Chinese company go public in the United States, in which about 108 through backdoor listing and about 95 direct listing up to 2014. When Chinese company select the US, many difficulties and problems exposed out; like copyright, equity, conflict about different law, etc. They had to make some reforms for go public. These reforms for their businesses has a very significant impact. Alibaba and Thunder is famous Chinese company. Alibaba Group Holding Limited is a Chinese e-commerce company that provides consumer-to-consumer, business-to-consumer and business-to-business sales services via web portals. Thunder is download the software, while providing cloud on-demand service. The internet is very important in their business. They made much reforms to go public; Alibaba’s partner system and Thunder’s business model change. These reforms have profound implications for their company. They also provide a better demonstration for Chinese companies listed in the United States. 1.0 Introduction On 2014, many Chinese company choose go public in the United States. Actually, more than 200 Chinese company go public in the United States, in which about 108 through backdoor listing and about 95 direct listing. I will talk about two famous Chinese company which go public in the United States on 2014; Thunder and Alibaba. Alibaba Group...
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...The Influence of Internet Finance for SME Financing in China Introduction Currently, SME (Small And Medium-size enterprises) is the foundation of promoting national economy development, constructing the subject of market economy and promoting the development of social stability in China (Wang, 2011). In recent years, the economic situation has experienced dramatic change and this huge variation stimulates financing needs of SMEs in China greatly. Nevertheless, the majority of SMEs have financing difficulties due to their personal limitations and insufficient external support. As a result, it is hard for them to have a further development. With the advent of the information technology revolution, Internet Finance is considered as a new effective way to solve the financial difficulties of SMEs and it brings about many positive influences, although there are some negative aspects to improve. This essay will firstly inform background information about the reasons for SME financing difficulty as well as Internet finance’s current condition. Additionally, it will give evidence for the main argument that there are more positive influences than negative influences of Internet finance on minor enterprises’ financing issue. Finally, some practical suggestions will be put forward, helping Chinese SMEs to find the optimal choice in financing. Background There are more SMEs in China than before in accordance with the relevant statistics. According to Wang (2011), SMEs account for 99...
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...participants from multiple institutional backgrounds. Its studies have examined public-private partnerships, infrastructure investment funds, stakeholder mapping and engagement strategies, comparative forms of project governance, and social, political, and institutional risk management. The Collaboratory, established in September 2002, also supports a global network of scholars and practitioners—based on five continents—with expertise in a broad range of academic disciplines and in the power, transportation, water, telecommunications and natural resource sectors. Collaboratory for Research on Global Projects Yang & Yamazaki Energy & Environment (Y2E2) Bldg 473 Via Ortega, Suite 242 Stanford, CA 94305-4020 http://crgp.stanford.edu 2 About the Author Vishnu Sridharan is a third year student at Stanford Law School. After graduating from Magna Cum Laude from Columbia College in 2004, he spent two years as a Peace Corps Volunteer in El Salvador, focusing his efforts on increasing municipal transparency and facilitating citizen participation in their government. Vishnu’s current work and research interests center on legal reform strategies in China. Vishnu worked in Shenzhen for a labor rights NGO in the summer of 2007, and he spent the summer and fall of 2008 working with GTZ Legal Advisory Services and the ABA Rule of Law Initiative in Beijing. After graduating in May 2009, Vishnu plans to continue...
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...A Study on Leverage and Firm Investment: Chinese Evidence Master of Science Thesis Huijie Bao Program Economics of Innovation and Growth Royal Institute of Technology (KTH) June 2010 Supervisor: Börje Johansson ABSTRACT This thesis focuses on the relationship between financial leverage and investment in Chinese listed firms. There are two novel aspects embraced here. One is choosing a marginal version of Tobin’s q instead of average q with Chinese data. Another one is taking the financial sector in to consideration. The research covers all sectors in the Chinese stock market. Main outcomes are listed below. Leverage imposes negative effects on investment, especially on non-state owned firms. Like Financials, Manufacturing and other highly regulated sectors, the inverse impacts of debt are week as well. However, marginal q fails in proof under the specific environment of the Chinese capital market which is still immature. High-leveraged firms experienced reverse influences of marginal q on investment. To sum up, over-debt financing indeed blocks the sustained investment. Relatively speaking, state owned firms in China suffer less since they are supported by the government and have fewer restrictions. Key words: financial leverage, marginal q, gross investment and state owned firms 2 ACKNOWLEDGMENTS Firstly, I would like to express my strong gratitude to my supervisor, Prof. Börje Johansson, whose profound knowledge, guidance and patience, greatly enhanced...
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...to exploit its full potential as its financial markets have still not been fully opened yet. In our report, we will make an analysis of what will happen if China opens their capital markets. First, we will introduce the Chinese capital markets, second discuss the current state of the stock and bond markets, then give a description of what should be done before opening the markets and finally conclude our analysis with what will happen after markets open. China’s capital markets do not have a long history. After the civil war in 1949, mainland China had a stock exchange market called the “Tianjin” Stock exchange market. However, the market was shut down in 1952 because of political acts that targeted capital markets and capitalists. After that date, the capital market remained close until the “opening up” policy set in. At that point, the stock markets reopen in the early 90s (Shanghai Stock Exchange and Shenzhen Stock exchange). China’s capital markets are comprised of the stock and bond markets, securities investment funds, and futures. The stock market can be divided in 3 categories, the A-shares, B-shares, and the H-shares. The A-shares are the most important stock shares in China’s mainland. It is a RMB denominated shares that is issued by Chinese companies and traded on the Shanghai Stock Exchange and...
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...industry rivalry as high fixed costs and excess capacity leads to price cutting and incumbents cannot shield themselves from price competition because product differentiation is difficult on standard products. Future investments in Fab capacity will disrupt industry supply and demand further and will ultimately lead to further price cutting which will put significant pressure on industry profitability. Incumbents will face further pressure from the rising relative bargaining power of suppliers who will pass on increasing R&D costs to incumbents. At the same time, entry barriers that have shield incumbents before from entry will be ineffective at stopping large scale entry from Chinese companies seeking a strategic foothold in the semiconductor industry and will use their large access to cheap financing and relatively cheap but skilled labour to seek a low cost competitive position which will depress prices further. Whilst there are few effective substitutes, developments in ‘hot’ areas such as flash memory are displacing DRAMS in selected products and there is always the possibility that a disruptive technology can spring up. Given the poor outlook for the DRAM, I expect to see further consolidation within the industry and an increase in strategic alliances between the west and the east as incumbents seek to take full advantage of opportunities in the emerging markets.Q2: How is Samsung positioned relative to its...
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...the steppes of Inner Mongolia to the tropical islands of Hainan Province, half of rural Chinese households lack access to banks or other formal financial services. With central government blessing, that will change over the next decade. But Chinese and multinational players considering this vast and variegated market will need innovative marketing and business models, a taste for on-theground campaigning, and patience. 1 2 Hidden in plain sight: the other economic miracle The popular narrative of China’s economic rise has been overwhelmingly urban and state-sponsored, from glittering architectural wonders rising up in Shanghai to new high speed railway lines and the growing appetite for cars and branded luxury goods. 3 Edited by Foxit Reader Copyright(C) by Foxit Software Company,2005-2007 For Evaluation Only. Government investment and private finance have indeed focused mainly on the country’s large cities, particularly along the eastern coastal provinces. That’s just half the story. Rural China, with between 50 and 56 percent of the population, or close to 700 million people, has emerged from the shadows and come of age economically. This vast collection of farms, villages, and towns in secondary coastal and inland provinces is now attracting attention from the Chinese central government, multinational corporations, investors, and local companies. Many larger Chinese enterprises based in the developed eastern coastal areas have been moving into the middle...
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...P 1-10 1. Companies were concerned about suddenly reporting a large liability for postretirement health care benefits, because they were afraid to suffer from the economic consequences. For example, the affected companies may have limit access to their capital when they need it for future investment, since they have to spend so much for health care benefits. In result, they will either have to borrow more money from the banks, which could negatively impact their financing agreements, or they will have to sell their productive assets to pursue their capital. In the worst case, these companies have to reduce their promised benefits to employees and perhaps curtail the benefits entirely. 2. In my opinion, FASB should not consider economic consequences of some affected companies said they would reduce or eliminate promised benefits to avoid recording the liability and expense, because all liabilities should be reported on their financial statements, so their auditors, future investors and stakeholders can make their decisions on the companies precisely. In addition, it would be difficult for FASB to estimate the possible effects of those companies and to decide either employers or employees benefit from the consequences. P1-13 1. It is beneficial to narrow worldwide differences in accounting practices, because it would help potential investors all over the world get to know their foreign companies easier, since different local accounting practices were eliminated. Moreover...
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...Paper Title: Trading favors within Chinese groups Discussant: Federica Capriglione Abstract Pyramidal structures is a dominant aspect of ownership in the developing world, which allow shareholders to control corporations with relatively low investments. On the one hand, the mismatch of cash flow and control rights leads to a range of agency problems and resultant resource misallocations, potentially impacting the macro economy. On the other, pyramids are one important mechanism that enables the formation of diversified business groups that are a dominant feature of business organization in much of the world. The paper aims to give an illustration of this within-firm trade-off of costs and benefits in the context of publicly traded firms in China. Moreover, capital investment and firm performance are investigated from the perspective of pyramidal ownership structure. In the last part of paper it is examined why when a listed firm gets into financial trouble and is designated as special treatment (ST) firm by the regulatory authorities, could have generated overwhelmingly favorable market reactions. That will be considered from the perspective of “tunnelling” and “propping up” practice within Chinese listed firms. 1. Introduction A dominant aspect of ownership in the developing world is pyramidal structures, which allow shareholders to control corporations with relatively low investments. The uneasy relationship between these controlling investors and minority shareholders, and...
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...Abstract This report aims to make a comparison of the Chinese and Indian power sector in terms of progress and reforms they have made to deal with their increasing demand requirements. The comparison of India was made with China because, India, when just independent, was much similar to China in terms of demographics and infrastructure availability. The power sectors of both the countries are studied and the differences are probed into. Much of these differences come in as a result of the way in which reform bodies were instituted and the reforms were carried out in both the countries. China has surged far ahead of India in its quest to satisfy the demand for power. Through this study, the authors wish to draw out the underlying methods through which China has achieved considerable success in power sector reforms. There are four ways in which China went ahead of India and which can be replicated in India. These are the way in which the power monolith was broken down in such a way that there was coordination among various bodies concerned, the way in which various projects were financed and approved through BOT, the way in which China has been emphasizing on production and conservation of power efficiently through market based incentives and the way in which it has been sensitive towards environmental issues by research and adoption of clean, less polluting technologies. The authors feel that these are the significant learnings, which one can take home and apply in India. ...
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...is the wafer with its Direct Wafer™ technology which has the potential to revolutionize wafer manufacturing by eliminating process steps, time, and waste with a refined, scalable process. 1366 Technologies’ eliminates the cost and production challenges that have hampered solar power’s ability to replace fossil fuels. The company combines breakthrough innovations in silicon cell architecture with lean manufacturing processes to make the world’s most cost effective and commercially viable high efficiency solar cells. Developed by a veteran team of scientists led by world renowned inventor, Ely Sachs, and its co-founder and CEO, Frank van Mierlo, the company’s innovative approach breaks the historic efficiency and cost tradeoff of solar photovoltaics. 1366 Technologies’ initial investment (Series A) financing came at the end of 2007 from venture capitalists and it received $3 million in initial funding for research and development from the National Renewable Energy Laboratory (NREL). In August 2009, the company received $4 million in early funding from the United States’ Department of Energy’s ARPA-E program. Given its success with NREL and ARPA-E, the company applied for a loan guarantee in early 2010 from the Department of Energy (DOE) while it issued a Series...
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...value-added supply chain, transportation, business, and related information services through focused operating companies competing collectively, and managed collaboratively, under the respected FedEx brand. FedEx Mission Statement (Excerpt) We serve the evolving distribution, logistics, and commerce needs of our customers worldwide, offering excellence and value in all we do. We sustain a financially strong company, with broad employee ownership, that provides a long-term competitive return to our shareowners. UPS Mission Statement (Excerpt) UPS hubs in China as of 2009: Shanghai and Shenzhen FedEx hubs in China as of 2009: Guangzhou Figure [ 1 ] - Source: http://www.travelchinaguide.com/map/ Introduction June 18, 2004 marked the start of an important international trend in logistics and carrier services. The U.S. and Chinese government came to an agreement that allowed the development of air cargo hubs and landing rights for commercial airlines in China. This pact not only opened up extensive new opportunities for the airborne market in general, but gave FedEx and United Parcel Service (UPS) exclusive cargo transportation rights (Bruner & Carr, 2010). At the time, FedEx was winning the battle for China, with its Chinese volumes nearly doubling from 2003 to 2004. Despite this, rival UPS still held the title as the world’s largest package-delivery company, and had been active in China since the late 1980’s (Bruner & Carr, 2010). FedEx had only done business...
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...Most ethnic Chinese share a common Confucian legacy with the Japanese and Koreans, but the way the Asian Chinese run their organizations, differs from them. The unique way that the Chinese business system operates is known as ‘overseas Chinese management’ (Petzall, Abbott & Timo 2007). Although both the Japanese and Koreans and the Asian Chinese are collectivist, community is more important to the former, while family ties and ‘guanxi’ are more significant to the latter (Petzall, Abbott & Timo 2007). ‘Guanxi’ is a special relationship between two individuals due to the existence of particularistic ties who are obliged to maintain a long-term relationship with mutual commitment and loyalty (Chen & Chen 2004). Overseas Chinese management is practiced by ethnic Chinese nationals in Singapore, Malaysia, Hong Kong, and other Asian countries who run their own businesses. According to Petzall, Abbott and Timo (2007), these traditional Chinese family firms are usually small-scaled businesses that employ no more than 200 people. Being small-scaled, there is little need for labour specialization and a high degree of structure and formality within the organization. Thus, there are few rules and standard procedures and low files and records in such small family businesses. Although there is no clear hierarchy of authority, the assumed important positions like owners, executives and managerial roles are held by family members and by others who have that special ‘guanxi’. Decision-making...
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...Executive Summary The Real Estate Investment in China is considered a growing business in the future. China being one of most populous place, people are seeking better living places. By seeing this investment opportunity in China, our group was highly interested. We believe that China has considerable amounts of land for this opportunity and our business to grow. Real Estate demand is raising in China since their economy continues to increase as well as people is becoming more wealthier. With our resources and experience in the field, our investment will be on its way. This report outlines the investment specifications. It is outlined in these categories: Country Analysis, Real Investment Analysis, Specific Components of the Project, the Best Mode of Entry, and the investment Risks Involved. Each outline analyzes the investment’s specific opportunity given the condition of the country. Based on this analysis, our group made a conclusion. A final recommendation of the proposed investment is given below. Country Analysis China is a developing country that has a great opportunity for foreign investors 5to establish their international business and make profits. China has a booming investment market and based on our research, the Livecast states that China’s investment environment is improving in recent years. Take an example from the Livecast, many enterprises transferred their business to China and trying to reduce the investment loss during the economic crisis in 2008...
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