Enterprise Reform In China Research Articles

State-owned enterprise reform in China: The new structural economics perspective

Based on the perspective of new structural economics, this paper reviews each stage of China's state-owned enterprise reform, summarizes their main features, and argues that the root of state-owned enterprise's low efficiency and soft budget constraints is their strategic and social policy burdens. According to the state-owned enterprise's existing situation, the paper provides suggestions for deepening its reform.

Thoughts on the Theoretical Problems in the Book of Xi Jinping , Zarządzanie Chinami I [The Governance of China I], Wydawnictwo (Publishing House) Adam Marszałek, Toruń 2019, pp. 572

The article includes five parts: 1. Introduction – information about the book promotion event held in Warsaw on December 19, 2019 on the Polish edition of Xi Jinping’s Governance of China vol. I. The book launch was great not only because of the editing and the contents of the book, but also because it was a political, economic, cultural and international event, since the author is the number one politician not only in China but also in the contemporary world. The introduction includes information about the book content and demonstrates its importance for the theoretical generalizations and recognition of the main problems of contemporary China. 2. According to the authors of the paper, problems mentioned in the book are especially important. The original Chinese way of building socialism and the early stages of Chinese revolution were national, anti-feudal, anti-capitalist, democratic and socialist. Mao Zedong established class-based Maoism as a Marxism-Leninism in the Chinese version, while Deng Xiaoping and his successors established and developed the socialist market economy, which is the continuation of Maoism in the new era and they created the Chinese path to the anti-capitalist revolution and the building of socialism with Chinese characteristics. The perspective of the development of China till 2021 and 2049 (as a modern and developed socialism) and its influence on the national rejuvenation is not only Chinese but also an international issue. 3. Third part of the paper is devoted to the problems of building socialism in China, the analysis of the theory of Xi Jinping, the leading role of the CPC, the economic role of the owner and foreign capital in economy and policy, and the socio-economic contradictions in the contemporary PRC. 4. Forth part concerns Confucianism and Marxism as theoretical and practical problems in China; the original Chinese culture and civilization; the continuation and discontinuation of the historical development in contemporary epoch; the original development; the policy of opening- -up; the necessity of considering human contents of Confucianism in building and developing of socialism in China. 5. Fifth part of the paper is on the future status of the Communist Party of China’s Economy. Since the emergence of state-owned economy, it has played a huge role in the economic development of all countries. However, under the way of neoliberalism, state-owned economy has gradually been associated with backwardness and inefficiency. On the forum of state-owned economy enterprise reform in China, General Secretary Xi Jinping gave out important instructions. State-owned enterprises are an important force for strengthening the comprehensive power of the country and safeguarding the common interests of the people. State-owned enterprises must be made stronger, better and bigger. Academia has had a huge disagreement on this, and some scholars believe that this is an act of favoritism toward state-owned enterprises. This paper analyzes China’s state-owned economy from the perspective of total factor productivity (TFP), Marx’s historical materialism, national productivity, and social development, clarifying that state-owned economic reform is diff erent from the system of “profit based demands” rooted in the private economic market, but a system based on national productivity and the “needs” of the people. Making state-owned enterprises “stronger, better, and bigger” is in line with the historical development of socialism and material productivity, resolving doubts on the direction of state-owned economic reform.

Does the Full Coverage of State-owned Enterprise Audits Promote the Preservation and Appreciation of State-owned Assets? On the Regulating Effect of the Transformation of State-owned Enterprises’ Supervision Functions in the State-owned Assets Supervision and Administration Commission

As the backbone and cornerstone of the national economy, state-owned enterprises have the primary responsibility of maintaining and increasing the value of state-owned assets. The 18th National Congress of the Communist Party of China opened a new round of state-owned enterprise reforms in China. The reform of the external supervision system of new state-owned enterprises clarifies that the National Audit Office have fully covered the auditing supervision of state-owned assets, and the State-owned Assets Supervision and Administration Commission （SASAC） has promoted the transformation of the supervision function of state-owned enterprises through the management of capital. How to realize the preservation and appreciation of state-owned assets is a new task and challenge faced by the National Audit Office and the SASAC. Based on the announcement of the audit results of the central government’s financial revenue and the expenditure announced by the National Audit Office in 2013-2018, starting with the breadth and depth of national audit coverage, and selecting 2012-2017 Commercial Central Enterprise Holding Listed Companies as samples, this paper empirically examines the relationship between the full coverage of state-owned enterprise audits and the preservation and appreciation of state-owned assets, and the regulating effect of the state-owned assets supervision and management function change of the SASAC on the relationship between the two. The study finds that: First, the coverage expansion of the auditing supervision objects of state-owned enterprises can effectively promote the preservation and appreciation of state-owned assets, and the deep increase is not conducive to the preservation and appreciation of state-owned assets. Second, the transformation of the SASAC’s function of managing capital has significantly enhanced the positive correlation between the coverage of the auditing supervision objects of state-owned enterprises and the preservation and appreciation of state-owned assets, but it does not affect the annual coverage of the auditing supervision content of state-owned enterprises and the preservation and appreciation of state-owned assets. The above conclusions are still established after the robustness test and the endogeneity test. Therefore, the National Audit Office should actively use the good opportunities created by the reform of the state-owned enterprise supervision system, expand the coverage of the auditing and supervision objects of state-owned enterprises, select the types of the auditing supervision contents of state-owned enterprises in a focused manner according to the annual work priorities of the party and the state, and design a more reasonable and effective state-owned enterprise audit coverage plan to promote the preservation and appreciation of state-owned assets. At the same time, the National Audit Office and the SASAC should also clarify their respective state-owned enterprises’ supervisory duties and responsibilities, give full play to the synergy between the two, and jointly promote state-owned enterprises to deepen reforms and realize the preservation and appreciation of state-owned assets.

Mixed Ownership Structures and Firm Performance in China Listed Firms

China has achieved impressive economic growth since market reforms. The design of appropriate compensation structures is imperative so as to incentivize top managers, but little research has been done to examine the top management compensation structure in China. This study investigates how listed firms in China relate executive compensation to their firm performance and how such relationships are influenced by firm ownership structure. The results provide evidence showing strong link between compensation and performance varies across firms with different ownership structure. Private ownership enhances the link between firm performance and top CEOs compensation, while government ownership weakens executive pay-performance relation and thus makes the firms less effective in solving the agency problem between shareholders and management. It suggests enterprise reform in China will need to be supplemented by change in ownership structure in order to ensure fully success by transforming its State Owned Enterprises (SOEs) to corporations in the direction of converting state shares to public shares.

The Current Wave of State Enterprise Reform in China: A Preliminary Appraisal

State enterprise reforms are underway in China, and include some positive and overdue corporate governance reform. However, the potential effectiveness of the reforms is compromised by the attempt of policy‐makers to achieve three goals which form an “impossible trinity”: increase firm autonomy; improve oversight; and assign new developmental missions to state firms. The goal of assigning new developmental missions to state firms is reflected in the design of new state investment companies which are intended to gradually take over ownership functions from existing agencies. The structure and function of the new ownership agencies undermines the potential of the corporate governance reforms at the enterprise level. These contradictions will be costly because state firms will likely be ineffective in carrying out developmental missions—particularly technology innovation—while also failing in the enterprise reform goal of becoming more efficient and profitable.

Comment on “The Current Wave of State Enterprise Reform in China: A Preliminary Appraisal”

Comment on “The Current Wave of State Enterprise Reform in China: A Preliminary Appraisal”

Comment on “The Current Wave of State Enterprise Reform in China: A Preliminary Appraisal”

Comment on “The Current Wave of State Enterprise Reform in China: A Preliminary Appraisal”

Lessons from Enterprise Reforms in China and Vietnam Can Stylized Necessary Conditions for the Sustainability of Socialist-Oriented Economic Strategies Be Identified?

This paper surveys a few key features of socialist-oriented economic (SOE) reforms in China and Vietnam, focusing particularly on the evolution of ownership structures and on the relative weight of market regulatory mechanisms, and discusses their general implications for socialist development. It tentatively concludes that some broad principles informing and constraining any feasible socialist-oriented economic strategy can indeed be identified.

Seeking for a Practicable Chinese Model of Corporate Governance

As an enormous market, China's economic reforms have attracted great attention in the world. In the beginning, a contractual mechanism was introduced into the enterprise system. To many Chinese, it became clear that the only solution to China's enterprise defects was to introduce a modern corporate governance system into the Chinese enterprise system. Since the early 1990s, Chinese policy makers have been determined that, in order to improve the micro-economic efficiency of enterprises, the enterprise reform should be directed towards improving corporate governance through corporatization. For example, the law conferred on the supervisory board or a supervisor the power to supervise the directors and the manager, and to propose interim shareholder meetings. When designing a practicable model of corporate governance for current enterprise reform in China, one must always bear in mind this premise. From this discussion on corporate governance problems in the Chinese enterprise system and methods of reducing insider control and agency costs, a practicable model of corporate governance for state-owned and controlled companies can be illustrated by the following diagram: In searching for a suitable model of corporate governance, this article has investigated the problems of the Chinese enterprise system and discussed the experiences of other systems.

The Historical Development of the Corporation and Corporate Law in China

This article sets out to investigate the development of the corporation and corporate law in the People’s Republic of China. It examines the corporate law and practice in this country. The evolution of the corporate system in China happens in the context of its economic reforms, which started in the late 1970s and which is currently in full swing. This grants great significance to the research on this topic. The article attempts to answer the following questions: How are the Chinese going to shape their corporate governance system? Has the corporate governance system been influenced and will it be influenced by any existing corporate governance theories and practice? How has the system of corporate governance developed in the context of the enterprise reform in China‘ What are the problems existing in China’s corporate governance ystem?

A survey of enterprise reforms in China: The way forward

The strategic importance of the state-owned enterprise (SOE) sector to the Chinese economy cannot be underestimated, thus the success of SOE reform is a significant factor in China's future economic prosperity. The dilemma facing state authorities is to develop market-orientated corporations while at the same time coping with potentially high unemployment and a range of equity and social justice issues. This paper presents an analysis of the current issues in SOE reform in China, drawing on relevant empirical evidence, and proposes a strategic direction and a framework for reform that challenges the recently announced program of privatization of listed SOEs. The literature indicates that state ownership is generally negatively correlated to performance. Conversely, Legal Person ownership positively influences performance. Other forms of private ownership are generally positively correlated to performance, with institutional ownership showing significant promise. Consequently, the divesture of state ownership is recommended and could be accomplished over three or four tranches. The state could divest its ownership by auction to strategic investors, both domestic and foreign, and in the next tranche an auction to the broad populace through units in mutual funds. The final proposed tranche being a distribution to nationwide pension funds to support retirement schemes, which should be made nationwide. Finally, listed firms should also issue shares as rights issues to offer present shareholders protection from dilution.

CEO turnover, firm performance, and enterprise reform in China: Evidence from micro data

In this paper, we use unique data on China's listed firms from 1998 to 2002 to show that CEO turnover is significantly and inversely related to firm performance, although the magnitude of the relationship is modest. In addition, we find that this turnover-performance link is weaker for listed firms that are still controlled by the state and those that have a relatively weak non-state controlling shareholder. In contrast, the appointment of independent directors enhances the turnover-performance link. Moreover, the listing suspension mechanism, adopted by China's securities regulatory agency, appears to be effective in improving the turnover-performance tie. Finally, listed firms with CEOs holding additional positions among the controlling shareholders have a weaker turnover-performance link. Journal of Comparative Economics 34 (4) (2006) 796–817.

CEO Turnover, Firm Performance and Enterprise Reform in China: Evidence from New Micro Data

Using comprehensive financial and accounting data on China's listed firms from 1998 to 2002, augmented by unique data on CEO turnover, ownership structure and board characteristics, we estimate Logit models of CEO turnover. We find consistently for all performance measures including both stock return and various accounting measures that: (i) overall, CEO turnover is significantly and inversely related to firm performance though the magnitude of the relationship is modest; (ii) CEO turnover-performance link is stronger when the percentage of company shares owned by the largest shareholder is larger. Furthermore, insofar as stock performance is concerned, (iii) turnover-performance link is found to be weaker for listed firms still controlled by the state; (iv) the appointment of independent directors enhances turnover-performance link; (v) the listing suspension mechanism, i.e., the ST designation, adopted by China's securities regulatory agency appears to be effective in improving turnover-performance tie; and (vi) listed firms with CEOs holding additional positions in the controlling shareholders have weaker turnover-performance link. Consistent with the law and finance approach to corporate governance and the literature on economic transition, our findings suggest that any fundamental improvement in China's corporate governance will require a broad program that encompasses not only privatization but also laws and their effective implementation to provide better protection for investors.

Corporate finance and state enterprise reform in China

This paper uses a novel approach in addressing two puzzles in the field of corporate finance in China, where government is a major player. In addition to the traditional approach based on agency theory and information asymmetry, the paper uses the political costs approach in studying the stock dividend puzzle and rights issues puzzle. The paper finds that the extent of political interference, managerial entrenchment, and institutional control affects corporate financing choices and dividend distribution decisions. The result sheds new light on improving the important corporate governance aspects of state enterprise reform in China.

A Comparison of Management Incentives, Abilities, and Efficiency between SOEs and TVEs: The Case of the Iron and Steel Industry in China

Previous articleNext article No AccessA Comparison of Management Incentives, Abilities, and Efficiency between SOEs and TVEs: The Case of the Iron and Steel Industry in China*Deqiang Liu, and Keijiro Otsuka Deqiang LiuTokyo Gakugei University Search for more articles by this author , and Keijiro OtsukaFoundation for Advanced Studies on International Development Search for more articles by this author Tokyo Gakugei UniversityFoundation for Advanced Studies on International DevelopmentPDFPDF PLUSFull Text Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by Economic Development and Cultural Change Volume 52, Number 4July 2004 Article DOIhttps://doi.org/10.1086/420904 Views: 73Total views on this site Citations: 16Citations are reported from Crossref © 2004 by The University of Chicago. All rights reserved.PDF download Crossref reports the following articles citing this article:Hana Nielsen Productive efficiency in the iron and steel sector under state planning: The case of China and former Czechoslovakia in a comparative perspective, Applied Energy 185 (Jan 2017): 1732–1743.https://doi.org/10.1016/j.apenergy.2015.12.125Shujun Ding, Chunxin Jia, Craig Wilson, Zhenyu Wu Political connections and agency conflicts: the roles of owner and manager political influence on executive compensation, Review of Quantitative Finance and Accounting 45, no.22 (Feb 2014): 407–434.https://doi.org/10.1007/s11156-014-0441-9Kjetil Storesletten, Fabrizio Zilibotti China’s Great Convergence and Beyond, Annual Review of Economics 6, no.11 (Aug 2014): 333–362.https://doi.org/10.1146/annurev-economics-080213-041050Hong-Yu Liu, Li Liu, Wang Kun Cheng Positive analysis of relationships between the scale of the board of directors of listed company in iron and steel industry and corporate performance, (May 2011): 301–305.https://doi.org/10.1109/ICBMEI.2011.5916932Jingjing Yang, Jing Chi, Martin Young A review of corporate governance in China, Asian-Pacific Economic Literature 25, no.11 (May 2011): 15–28.https://doi.org/10.1111/j.1467-8411.2011.01283.xZheng Song, Kjetil Storesletten, Fabrizio Zilibotti Growing Like China, American Economic Review 101, no.11 (Feb 2011): 196–233.https://doi.org/10.1257/aer.101.1.196Shujun Ding, Zhenyu Wu, Yuanshun Li, Chunxin Jia Executive compensation, supervisory board, and China’s governance reform: a legal approach perspective, Review of Quantitative Finance and Accounting 35, no.44 (Feb 2010): 445–471.https://doi.org/10.1007/s11156-010-0168-1Haiyang Zhang, Tetsushi Sonobe Business Incubators in China: An Inquiry into the Variables Associated with Incubatee Success, SSRN Electronic Journal (Jan 2010).https://doi.org/10.2139/ssrn.1749078Qi Wei, Chris Rowley Pay for performance in China's non‐public sector enterprises, Asia-Pacific Journal of Business Administration 1, no.22 (Sep 2009): 119–143.https://doi.org/10.1108/17574320910989087Rene W Kaeppeli The effect of specific organizational and managerial factors on the performance of foreign subsidiaries in Japan, Asian Business & Management 8, no.11 (Feb 2009): 103–123.https://doi.org/10.1057/abm.2008.26Xiaoling Hu, Hua Ping, Charlene Xie, Xiaoju Hu Globalisation and China's iron and steel industry, Journal of Chinese Economic and Foreign Trade Studies 1, no.11 (Jan 2008): 62–74.https://doi.org/10.1108/17544400810854504Larry Li, Tony Naughton, Martin T. Hovey A Review of Corporate Governance in China, SSRN Electronic Journal (Jan 2008).https://doi.org/10.2139/ssrn.1233070Takao Kato, Cheryl Long CEO turnover, firm performance, and enterprise reform in China: Evidence from micro data, Journal of Comparative Economics 34, no.44 (Dec 2006): 796–817.https://doi.org/10.1016/j.jce.2006.08.002Michael Firth, Peter M.Y. Fung, Oliver M. Rui Corporate performance and CEO compensation in China, Journal of Corporate Finance 12, no.44 (Sep 2006): 693–714.https://doi.org/10.1016/j.jcorpfin.2005.03.002 Takao Kato / Cheryl Long Executive Compensation, Firm Performance, and Corporate Governance in China: Evidence from Firms Listed in the Shanghai and Shenzhen Stock Exchanges Kato and Long, Economic Development and Cultural Change 54, no.44 (Jul 2015): 945–983.https://doi.org/10.1086/503583Takao Kato, Cheryl X. Long Executive Compensation, Firm Performance, and Corporate Governance in China: Evidence from Firms Listed in the Shanghai and Shenzhen Stock Exchanges, SSRN Electronic Journal (Jan 2004).https://doi.org/10.2139/ssrn.555794

State-Owned Enterprise Reform in China. Justin Yifu Lin , Fang Cai , Zhou Li

Previous articleNext article No AccessReviewsState-Owned Enterprise Reform in China. Justin Yifu Lin , Fang Cai , Zhou Li Jean-Françis HuchetJean-Françis Huchet Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by The China Journal Volume 50Jul., 2003 Published on behalf of the Australian Centre on China in the World at the Australian National University Article DOIhttps://doi.org/10.2307/3182282 Views: 6Total views on this site Citations: 1Citations are reported from Crossref Copyright 2003 The China JournalPDF download Crossref reports the following articles citing this article:Mengye Zhu, Ye Qi, David Belis, Jiaqi Lu, Bart Kerremans The China wind paradox: The role of state-owned enterprises in wind power investment versus wind curtailment, Energy Policy 127 (Apr 2019): 200–212.https://doi.org/10.1016/j.enpol.2018.10.059

The Elusive Market: Privatization, Politics and State–Enterprise Reform in China

Although China’s largest state–owned enterprises (SOEs) are destined to remain state–owned for the immediate future, recent reforms have affected these SOEs’ property rights and ownership structures. Moreover, the government’s insistence that privatization is not implied by present reform programmes is increasingly contradicted by actual developments and managers’ attitudes at the enterprise level. This article explores some of the political and organizational tensions created by this present phase of SOE reform.

Holding company risk in China: a final step of state-owned enterprises reform and an emerging problem of corporate governance

Public Enterprise Reform in China has reached a plataeu, and is awaiting the last step of privatization. Most of non-regulated industries in China has improved their competitiveness thorough a hard and intense competition, particularly in the home appliance industry. However, it still happened that excellent companies with nationwide brands suddenly fall into severe difficulties and suddenly disappears in the industry, as we seen in the early 1990's. Author argues that this is caused by structure of corporate governance in China, which can facilitate to enhance the control right of the controlling shareholder, that is the government for the most of listed company in China, compared to their holding cash flow right. This corporate structure, which is called “pyramiding” allows an implicit controller of the company, the municipal government, to exploit. In the cases of listed company in China, the “holding company” is the conduit of this risk. Experiences of 2 companies from home appliance industries in China will be documented here.

Chinese Urban Life under Reform: The Changing Social Contract. By Wenfang Tang and William L. Parish. [Cambridge: Cambridge University Press, 2000. 308pp. £15.99. ISBN 0-521-77865-4.

As state enterprise reform in China gathers pace, this book provides a timely description of urban life between the late 1980s and early 1990s, and the transformations wrought by the emergence of a market economy. The authors, a political scientist and a sociologist, explore two central issues: the systemic consequences of socialist and market social contracts, and the winners and losers in the politics of transition.

Enterprise Reform in China: Ownership, Transition, and Performance. Gary H. Jefferson , Inderjit Singh

Previous articleNext article No AccessReviewsEnterprise Reform in China: Ownership, Transition, and Performance. Gary H. Jefferson , Inderjit Singh Ron DuncanRon Duncan Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by The China Journal Volume 47Jan., 2002 Published on behalf of the Australian Centre on China in the World at the Australian National University Article DOIhttps://doi.org/10.2307/3182096 Views: 4Total views on this site Citations: 1Citations are reported from Crossref Copyright 2002 The China JournalPDF download Crossref reports the following articles citing this article:Nuria González Álvarez, Anderson Argothy Research, development and growth in state-owned enterprises: empirical evidence from Ecuador, Industry and Innovation 26, no.22 (Jul 2018): 158–175.https://doi.org/10.1080/13662716.2018.1493982