The investment financing system of China's space enterprises needs restructuring since the government's capital input is decreasing and borrowing from banks has become much more difficult, an analyst said.

Readers at home and abroad my be curious about how the space enterprises raise money.

"There's no accurate figures to show the financing channels of space industries, even for the national defence department of Finance Ministry," said an official in charge of budget-making.

He said that there are mainly three sources of funding: fiscal fund; R&D funds from State Development and Reform Commission, money raised in the stock market, and loans from banks; and specific funds for education and technology researches.

The funds can also be listed in three categories: that from government, enterprise and financial institutions respectively, in the ratio of about 1:3:1.

Government funds were the only financial resources of space enterprises in the past. "At that time, all the money are transferred from government once the project was approved," a researcher of China Aerospace Science & Technology Corporation said.

However, the R&D allocation from the government in 2001 dropped nearly 20 percent comparing with that of 1995. And the government continues to slash its input.

On one hand, statistics from China Financial Yearbook show that the government funds had decreased from 5.3 percent of total capital input in 1980 to 3.7 percent in 2001. The fiscal input from government in 2001 was 70.3 billion yuan (US$8.5 billion).

On the other hand, funds from enterprises in 2001 doubled that of 1995, and the enterprise funds hit record high in 1999. The supports from financial institutions have been comparatively steady, except that in 1997 only 5 million yuan (US$0.6 million) were borrowed from banks, due to the Asia financial crisis.

Besides, the R&D funds for China's spacecraft manufacturing enterprises in 1995, 1999 and 2001 were 258 million yuan (US$31 million), 350 million yuan (US$42.3 million) and 290 million yuan (US$35 million) respectively. The overall funding in the past seven years had maintained stable.

(China.org.cn by Tang Fuchun October 31, 2003)