Many European companies, and especially SMEs, offer products and services highly sought after in China. The main reasons keeping these companies from capitalising on this demand by investing in the country are a lack of information on the Chinese market, regulatory and legal challenges and insufficient financing options. Difficulties in finding funding for one’s endeavours is especially pronounced for companies looking to enter the Chinese market, as foreign involvement in China’s financial markets is low and many established financial institutions emphasise the risks involved and are therefore reluctant to invest.
To address these challenges, the EU SME Centre has invited financial expert Stephen de Pretre to discuss the options available to finance an SME’s entry into the Chinese market. Watch the webinar recording or download the slides to learn more about:
- internal funding options via registered capital or shareholder loans;
- external sources like loans, guarantees or private equity;
- common challenges for SMEs trying to access external funding and how to overcome them;
- foreign exchange control and RMB internationalisation.
Here is an overview of the major financing options that FIEs can explore in China:
- Indirect Funding
- bank loans
- financing guarantees
- note discounted
- funding from other licensed financial institutes
- Direct Funding
- public debt issuing
- commercial credit financing
- folk financing
- shareholder loans
- employee funding
- company surplus
- undivided profit
Stephen, a Belgian national, has been assisting foreign companies in China for the last 12 years. In 2000, he joined a small but successful Australian consulting firm which was later acquired by the British Management Consulting Group PLC. He was responsible for setting up their China offices as well as HR and management consulting on the China projects of large companies from Africa, America, Asia and Europe. In 2009, he founded Sapphire Group Asia Pacific Ltd, which assists European private equity funds and multinational corporations with their expansion in China and Asia by managing mergers and acquisitions from sourcing to integration. Stephen has a post graduate degree in SME management from the Mercator Hogeschool Ghent.
You can find the recorded video on Youtube: