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Inter-enterprise debt and macroeconomic fluctuations (on)

Author: FanGang From: www.yourpaper.net Posted: 2007-11-21 21:05:55 Read:
China's economy in recent years, except outside the corporate rate on bank liabilities troubled by (state-owned enterprises on bank liabilities, the average rate of 79%) 2, is also affected by the troubled corporate debt arrears between the so-called inter-enterprise debt default problem. Inter-enterprise arrears problem was worsening trend since the second half of 1993. Accounts receivable 370,000 state-owned industrial enterprises in the country has almost doubled in 1994 compared with 1993, reaching 631.421 billion yuan; than an increase of 87.7 billion yuan from the beginning of the year to the end of May 1995 amounted to 719.3 billion yuan,; estimated annual will $ 80 billion, compared with the previous year and an increase of 200 billion yuan (see text Table 1 and Table 3 about the statistical analysis of the growth of debt in recent years, enterprises). Debt of tired, many businesses have been unable to operate normally; entire economy is also to a large extent by the impact of inter-enterprise arrears problems. The business community and economic profession, inter-enterprise debt arrears of the most serious problems in the Chinese economy.
The task of this paper is to enterprise arrears, "the reasons for the emergence and development of this phenomenon, its micro-economic activities and macroeconomic performance impact, issues such as the role of economic fluctuations qualitative and quantitative analysis, and more in-depth discussion of the the processing chain debts basic ideas and specific practices.
The objects discussed in this article, which is based on corporate financial statements of people owed money "for the quantitative limits of inter-enterprise debt. Lack of delinquencies time, the proportion of corporate debt in arrears part of the data investigation, we primarily through the analysis of the total amount of inter-enterprise debt to discuss. In addition to the China Statistical Yearbook, we also take advantage of the two samples of data, a National Bureau of Statistics, more than 370,000 local industrial enterprises "(hereinafter referred to 370,000) statistics, another is a gathering of the Industrial and Commercial Bank finishing the 4,000 large and medium-sized enterprises (most of which are state-owned enterprises, hereinafter referred to as 4000) statistics.

First, the general principles of inter-enterprise debt

The relationship between the economic base of the 1.1 enterprise normal credit: prospects for the sale of the final product

From the level of the basic theory of debt between enterprises, no matter what happened, are an integral part of the total social means of circulation.
The most often used in the modern economy is the most important means of trading based on the national credit, currency issued by the government's monetary authorities. But the means of exchange is not necessarily issued by the Government, the credit means is not limited to government credit or state credit. Historically, the first form of banknotes between private credit notes? quot; bank notes; On the other hand, commercial paper, that is, debt obligations between enterprises, is still trading activities between the intermediary enterprises widely used as a means of trading. In the business-to-business transactions between the seller, buyer product sales prospects trust (which is the basis of credit), imposed a "credit" within a certain period of time, the buyer is in a certain period of time after the payment, under the market economy is a widespread credit relationships.
Look from the perspective of individual enterprise, inter-enterprise debt depends on the expectations and trust of the debt party products sales prospects, and from a macroeconomic point of view, the existence of inter-enterprise debt, depending on the final product (investment goods, consumer goods, and exports products), sales prospects expected. In reality, the majority of enterprises involved in the transaction only? quot; intermediate goods; most production is not the final product (such as steel) is not used for the purpose of final goods, but intermediate goods (steel is not used for the purpose of investment, construction plant, but as a raw material, processing of other items); But look at the whole process from the economic activity, only the purchase of the final product can be achieved by monetary value of intermediate products to be able to achieve a form of currency; must be assumed that the final product purchase currency to achieve (1) the value of the intermediate products can ultimately by the currency to achieve pay, just need a certain time interval. Therefore, the enterprise is in fact based on the final product sales prospects for the credit guarantee credit? quot; intermediate products.
It can be seen: look at the problem from the point of view of the economy as a whole, the enterprise between normal credit scale, the scale of market demand depends on the "final product"; impact on aggregate demand (final demand) factors will affect to the scale of the enterprise normal credit. This means that the debt situation, and is closely related to the status of the macroeconomic performance. These basic relationships are very important in our analysis of the relationship between the problem of inter-enterprise debt and macroeconomic fluctuations.

1.2 Total trading volume with two different means of transaction

Although inter-enterprise debt eventually general or by a monetary payment or settlement to complete the transaction, but in a certain period of time (in some observation time point), the existence of a country in a given period of unpaid business bills part of the total value, that is, in this period the total amount of commercial paper for the trading activities of the intermediary; presence of corporate debt that traded commodity in a certain period of time has been achieved, there is not mediated by the currency, but by commercial enterprises credit intermediary. Equation (1) to express this relationship:
(1) PT = MV D
Where P represents the price level, T the total amount of the transaction (physical quantity), the M representatives monetary amount of (Government Credit), V is the velocity of money D occurred in the period between enterprises unpaid debt (incremental ). The RHS of the sum represented a certain speed of flow of the means of exchange or credit means total.
In some cases, the economic reality in the enterprise debt will reach a certain maximum or near, also old debts will come due to the new debt, but the total amount of basic stabilized and no longer growing (D = 0) social transaction total PT-scale change and economic growth, mainly by the amount of money M and its velocity of circulation V determined. It is people usually ignore the presence of commercial credit and only pay attention to the study of the role of changes in the quantity of money.


However, the opposite will happen, that is: the amount of a given currency and circulation speed, inter-enterprise debt increased scale of economic activity (PT) will also change accordingly. This important relationship is the main problem to be discussed in the following section of this article.

1.3 inter-enterprise debt total unlimited growth possibilities

Assume a closed economy (exports and imports), and need not pay taxes to the government, only wages (personal income) must be paid in the currency of the only consumer goods must be purchased with currency (used only on the assumption that wage premise consumption, these two assumptions are equivalent); intermediate goods and investment goods can pay the monetary equivalent to that the number of wage costs, transactions carried out by means of inter-enterprise debt. We will have a limit of nature? quot; multiplier ", that is the reciprocal of the ratio of wage costs to total sales. multiplier and the product of the total loan amount, that is, the theory of inter-enterprise debt limit
Moreover, this limit is not the limit of the debt total, but only the debt limit, because of the multiplier here is the issue of wage costs and the current ratio of the total trading volume of the incremental. This means that, if the enterprise can not also of old debts, the total amount of inter-enterprise debt can grow indefinitely go on, every year can increase the part of the debt does not exceed the limit (which can also constitute a? Quot; Steady state ", steady-state). At this time, in order to make inter-enterprise debt growth slowed down, the only way is to increase the money supply so that the pay scale of wages and consumer purchasing power decline and thus the entire economic activity downsizing.
This limit seem "too big" for any real economy, the actual debt Incremental always much smaller. In fact, this does not explain anything else, simply stated, it is a "debt, the transaction is not between enterprises rely on mutual debt, corporate credit not everyone can accept in any case credit, a business is no may be infinite debt also take on new debt and then indefinitely.
So, the question boils down to why people want to pay off debts and between enterprises, why not borrow indefinitely? From the point of view of microeconomics, simply because of indebtedness and debt cost, and timely debt, but more borrowing is good.

1.4 inter-enterprise debt microscopic behavior analysis

Enterprises are now temporarily assume that we will be discussing the "hard budget constraints" (the next section, and then relax this assumption), look for such enterprises, lend it to others debt and owe debts to consider variety of factors.
(1) creditors. As a creditor, the credit for his major benefit is to maintain a long-term trading relationship with customers so as to maintain the market; but also in order to avoid the costs arising from fluctuations of the production process. Continue to the old customers in the the less economic boom when shipments and to give them some credit, and also enables the production continuous to avoid shutdown today, tomorrow re-organized production and restructuring costs. "
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