Analysis of the Effect of the Financial Support on China's Equipment Manufacturing

The leading enterprises of Chinese equipment manufacturing have long been attempted by the international capital. The development of the national important technology & equipment is always confronted with the bottleneck of the deficient fund, and it calls for strong support from Chinapsilas finance system urgently. Based on the panel data from 1998 to 2006 of Chinapsilas equipment manufacturing, a model is built to reflect the relationship between our financial system and the ratio of value added to gross industrial output value of Chinapsilas equipment manufacturing industries, and the impacts of bank credit and equity financing from capital market to the increase of every equipment manufacturing industry are analyzed. The results demonstrate that the actuality of China's finance system has not been suitable for the need of the development of domestic equipment manufacturing, and the effect of the financial support is not good enough. Furthermore, some implications for insuring the future development are put forward.