Reform Of State-owned Enterprises In China Research Articles

Would behaviors of state-owned enterprises impact the performance of downstream industries in China?

The inefficiency of state-owned enterprises (SOEs) not only affects their own performance but also has implications for downstream enterprises. However, existing literature has not been able to accurately assess the impact of SOEs on the downstream sector. This study presents an innovative approach by combining input-output technologies and econometric models to construct Pair-Weighted Least Square (PWLS) estimations using a dataset of 20,403,924 firm-level pairs. The analysis examines the impact of SOEs on downstream performance and provides evidence of their negative influence as well as the effectiveness of SOEs reform in China. The findings indicate that SOEs have exerted a detrimental effect on downstream performance between 2008 and 2019. Medium-sized SOEs, due to their larger scale and relatively lower regulation, exhibit a particularly negative impact. However, as the reform of SOEs in China has progressed, the negative effect of SOEs on downstream enterprises has gradually diminished. Important factors indicative of SOEs reform, such as efficiency, equity concentration, and scale, play crucial roles in mitigating the harmful effects on the downstream sector. The reform of SOEs in China can offer valuable insights for the reform of state-owned enterprises worldwide.

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.

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”

The new round of reform of state-owned enterprises

Purpose – This paper aims to review the state-owned enterprise (SOE) reform in China and analyzes the role of the Chinese Government in the progress of the SOE reform. It provides suggestions to better guide the direction of further reforms of the SOEs in China. Design/methodology/approach – This paper reviews the historical path of the SOE reform in China and analyzes the underline policy implication associated with the reform. Findings – The success of the function-oriented SOE reform depends on the transformation of governmental functions. Only with the linkage of governmental functions reform can we change the existing pattern of economic development, build a solid foundation for the socialist market economy and achieve the final triumph. Originality/value – This paper provides suggestions to better guide the direction of further reforms of the SOEs in China.

Consideration in non-tradable shares reform: the compensation for benefit expropriation

Purpose – The purpose of this paper is to investigate the main determinants of consideration in China's non-tradable shares reform. The primary objective is to dig into the institutional factors that affect consideration in China's non-tradable shares reform. Design/methodology/approach – The authors examine a sample of 846 state-owned enterprises (SOEs) that have finished the non-tradable shares reform during 2005-2009. Using the multiple liner regression, the authors discuss the important factors which affect consideration. Findings – The authors find that ownership reconstruction form and capital occupation are very important determinants of consideration. The main factor which affects controlling shareholders’ capital occupation is the form of ownership reconstruction. Capital occupation of incompletely ownership reconstructed companies is more serious than those of complete ownership reconstructed companies. Furthermore, companies of incomplete ownership reconstruction and higher capital occupation paid higher consideration as a compensation for the expropriation of tradable shareholders’ benefit during the shares split period. Originality/value – This study provides not only a deeper understanding of the reform of non-tradable shares but also an important empirical reference for reform of SOEs in China.

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.