By Wang Zhao　

Date: 2005/01/24

Abstract:

Along with an increasingly relaxed control in the financial sector in Japan and South Korea, their bond market has been growing rapidly, which is replacing the banks as the financing source to the large-sized enterprises. As a result, the banks are shifting their funds to the small and medium-sized enterprises under competition pressure. However, the ad hoc issuance of junk bond with no consideration of financial risks to directly promote the financing of small and medium-sized enterprises is not successful. This experience should be regarded as highly relevant to China in enhancing financing for the small and medium-sized enterprises through the bond market.