Motivation And Economic Consequences Of Mixed Ownership Reform In Private Enterprises

In 2013,the document "Decision of the Central Committee of the Communist Party of China on Several Major Issues of Comprehensively Deepening Reform" focused on the development of a mixed ownership economy with clear requirements.The document stated that a mixed economy of existing collective capital,state-owned capital,and non-public capital should be actively developed.In this regard,it can be interpreted that along with the gradual promotion of the state’s mixed ownership reform,the mixed reform has evolved into a two-way promotion of the status quo,and no longer just the one-way introduction of private capital in early SOEs.Compared to the model of mixed reform through the introduction of state-owned capital by state-owned enterprises that have been promoted for many years,private enterprises introduce state-owned capital in the form of mixed reform,often to get rid of the current business difficulties or seek more resources to promote their further development.Since 2014,a large number of larger private enterprises have been involved in PPP projects,and the target company selected for this thesis,Oriental Garden,is known as the "first PPP stock".As one of the first companies to participate in PPP projects,Oriental Landscape has broken through the bottleneck of development by expanding from a traditional horticulture business to soil and water ecology management,which has played a positive role in the performance of the company.However,as the depth of participation deepened,coupled with the tightening of national leverage policies in recent years,many related companies began to experience difficulties in repayment and broken capital chains,and Oriental Garden was not immune to these problems.After experiencing the embarrassing situation of "the coldest debt issuance in history",Oriental Garden then set out to change its way of survival by introducing state-owned capital.Based on the above-mentioned situation,this article analyzes the process of the successful transfer of control of Oriental Garden after the introduction of state-owned capital twice,and analyzes the motivation for the hybridization of Oriental Garden and its economic consequences before and after the hybridization from both financial and market perspectives in the light of the internal and external environment,and points out its shortcomings,hoping to provide some references for the research and practice related to the hybridization of private enterprises.We hope to provide some references for the research and practice of private enterprises’ hybrid reform.After the research and analysis,this thesis draws the following main conclusions:(1)the motivations for Oriental Garden’s hybrid reform are multifaceted,including policy support,optimization of corporate governance and utilization of state-owned resources for synergistic benefits,etc.,but the main reason is a series of operational and financial risks caused by its large number of unreasonable equity pledges;(2)the most direct effect of introducing stateowned capital is to obtain a large source of bailout funds,which greatly eased the financial pressure faced by Oriental Garden.At the same time,the injection of new investors and managers has improved the equity structure and governance level of Oriental Garden to a certain extent;(3)although the effect of introducing state-owned capital is obvious in the short term,in the medium and long term,the company must be able to deal with some of the frictions in the mix,such as the friction in business and management strategy,if it is only to quench the temporary thirst,it is not conducive to the long-term development of the company development.