Policy Options for Reform of Chinese State-Owned Enterprises

Abstract

This Discussion Paper summarizes the proceedings of a high-level international symposium on five policy option papers for the reform of Chinese state-owned enterprises, held in Beijing in June 1995. The goal of these reforms is to improve enterprise performance and the quality and efficiency of economic growth. It states that over the past 16 years two general public enterprise reform assumptions have been developed. They are: (i) that establishing a modern enterprise system is necessary for the development of socialized mass production and a socialist market economy, and (ii) that the strategic objective of such reform is to introduce and strengthen, by the end of this century, the management mechanisms and framework of a modern enterprise system that allows the large and medium state-owned enterprises to continuously play a leading role. Some issues the paper addresses include: (1) recent international experience relating to the improved performance of state-owned enterprises; (2) property rights and responsibilities regarding state asset management reform; (3) corporatization of enterprises; (4) reducing social burdens and establishing a social insurance system; (5) internal mechanisms for allocating resources in large restructured public enterprises; and (6) the role of banks in restructuring the debt of these enterprises. It is expected that through the implementation of the policy options discussed, China will see real improvement in the quality and efficiency of its state-owned enterprises.