Study On The Legal Governance For State-owned Capital Operation

State-owned capital is closely related to political construction, economic construction, social construction, cultural construction and the ruling party’s own construction of China, while as an important component of economic base directly influencing the future development of the social system of socialism. At present, state-owned capital operation (hereinafter named as SCO) has become the main channel of developing state-owned economy and has an extremely important role in promoting the socialist market economic system. In recent years, great attention has been paid to SCO and its problems by academics, and thus a large number of laws and regulations have been established. Therefore, SCO has been chosen as the object of study. This paper based on the current situation and existing problems of Chinese state-owned capital operation, highlights the social system, legal regulations and specificity of social human traditions of our state, as well as selectively absorbs useful SCO experience abroad, while mainly aiming at building SCO legal system adapting to the reality of Chinese socialist social system. In addition to the foreword and conclusion, the paper is composed of three parts while focusing on the legal governance of SCO. The first part including the first and second chapters makes research on the basic theory of the state-owned capital and SCO, chiefly explaining what is SCO and why governing it with law. The second part including the third, fourth and the fifth chapters works over the framework of SCO legal governance, while specifying how to govern SCO with law. Third part including chapter VI focuses on improving the legislative proposals concerning SCO.Chapter chiefly analyses several basic issues, such as capital, state-owned capital, the specificity of Chinese state-owned capital and redefining the role of Chinese state-owned capital. First, the definitions of capital and state-owned capital are discussed. Second, specificities of Chinese state-owned capital are analyzed. State-owned capital not only has natural attributes of all forms of capitals, but also has social attribute adapting to a particular political system. Chinese state-owned capital has domination of status, breadth of distribution, diversity of targets and other characteristics. Third, the role of state-owned capital should not be as small as possible, it is be decided by the unique reality of our state that on the premise of efficiency state-owned capital should play more important role even in the field of competitive economy because of several following reasons. Strong state functions must rely on the strong financial resources. The consolidation of the socialist political system needs to develop and strengthen the strategic position and leading role of state-owned capital. To strengthen the role of state-owned capital is also conducive to the implementation of macro-control policies. The Chinese cultural tradition gives state-owned capital development advantages.Chapterⅱis concentrated on state-owned capital operation and its legal governance. First, state-owned capital operation is discussed. SCO refers to acts that investors of state-owned capital, state-funded enterprises, as well as other stakeholders under the premise of realizing the unity of social and economic benefits, allocate, utilize, monitor state-owned capital, and distribute benefits in accordance with the law. Then, Chinese SCO history is briefed, the significance of strengthening SCO is emphasized and the characteristics of SCO are demonstrated. Second, the legal governance for SCO is briefed. After the definition is given, the importance, institutional structures and value orientation of SCO are outlined.Chapterⅲstudies configuration and exercise of the representative right of SCO. It is a key question that only by who the representative right is exercised that the operating results can comply with the interests of owners. First, the origin of representation right is explored. Since the public cannot directly exercise their ownership of state-owned capital, the representatives on behalf of their interests are required. Second, people who can represent the public are discussed. Because“the public”are the real and final owners of state-owned capital, state legislatures, state governments and their departments, state-funded enterprises, professional managers are entitled to be the representatives. Third, the contents of representation rights are described in detail. The Chinese National People’s Congress working as the first-class representative should have rights, such as lawmaking, supervision, distribution of income, final disposal of ownership. The State Council working as the second-class representative under the authorization of National People’s Congress executes the rights of legislature, supervision, income distribution, disposal of ownership. The State-owned asset management agencies working as the third-class representative are in charge of directly supervision, distribution of income, disposal of ownership. State-funded enterprises working as the fourth-class representative are directly responsible for the authority of SCO. The professional managers of state-funded enterprises working as the fifth-class representative are authorized to exercise decision-making, supervision, implementation right concerning SCO. Fourth, all the representatives above shall be responsible to the public for they are real and final owner of state-owned capital and all their obligations and responsibilities should be guaranteed by the following measures. The Chinese National People’s Congress’s representative authority should be strengthened. The State Council should be responsible for the quality of state-owned capital and the performance of SCO. State-owned asset management agencies’authority should be relatively independent and only responsible for the performance of SCO and the competitiveness of state-owned capital. State-funded enterprises must rely on more reasonable corporate governance structure and corporate social responsibility mechanism. The professional manager team should really be established according to the requirements of SCO.Chapterⅳstudies configuration and exercise of the monitoring right of SCO. Only if the process of state-owned capital operation be promptly, appropriately and reasonably monitored can SCO achieve the purpose of enhancing competitiveness, and realizing the public’s interests. First, the relationship between monitoring right and SCO is analyzed. Monitoring right refers to the supervision, management and control authority enjoyed by original owners of state-owned capital and their representative in accordance with the law. Monitoring right has the following complicated relationship with SCO. Monitoring right complying with the changing process that varies from state-owned assets static management to state-owned capital dynamic operating is essential to state-owned capital secure and steady operating. The diversity and complexity of risk facing by SCO determines that the existence of monitoring right is not only necessary but also crucial. Monitoring right can ensure that all the representatives of the public assume their corresponding responsibilities. The enhancement of state-owned capital competitiveness depends on effective monitoring right institution. Second, the transition between state-owned assets supervision right and state-owned capital monitoring right is interpreted. In the sense of direction, the one-way state-owned assets supervision right has become two-way or multi-directional state-owned capital monitoring right. In the sense of regulatory body, the singleness of public authority has become the diversity of public authority and private individuals. In the sense of regulatory means, the rigidity of public law measures has become the combination of rigidity of public law measures and flexibility of private law measures. In the sense of regulatory object, the static assets have become the dynamic value stream. Third, the configuration of monitoring right is investigated in detail. The public at least enjoy the right to know and question, as well as public interest litigation right. In addition to making laws, approving the budget, questioning, reviewing report, independent inquiry implemented by the specialized agency under the National People’s Congress is also an effective and important monitoring measure. State-owned asset management agencies have to face monitoring executed by the public, the National People’s Congress, or even State-funded enterprises while fulfilling their responsibilities for monitoring state-funded enterprises, including performance evaluation, financial audit, budget management, accountability affixing and so on. State-funded enterprises assume the corresponding responsibility to monitor directors, supervisors and senior managers of state-funded enterprises even if they are appointed by state-owned asset management agencies. Directors, supervisors and senior managers of state-funded enterprises have the authority to monitor each other. Finally, in order to ensure the execution of monitoring right, information disclosure, performance evaluation, financial oversight, accountability affixing institution is established and improved.Chapter V studies the configuration and realization of income right. Income right is the inevitable product of state-owned enterprise reform in a market economy. First, values of income right are analyzed. Income right determines the tendency of state-owned enterprise reform and state-owned capital operation. The exertion of income right endows the existence of enormous amount of state-owned capital with legitimacy. The conferment of income right can inspire the public and their representatives to pay more attention to SCO. The sharing of income right is an inevitable requirement for maintaining and developing socialist system under market economy conditions. Second, subjects of income right are designed. The public should be entitled to sharing the proceeds of state-owned capital operation, but only having a collective, restricted, indirect authority. The National People’s Congress being in a detached and independent position should ensure the public achieve their proceeds by exercising its legislative power, decision-making power and supervisory power. The State Council can share part of the state-owned capital operation proceeds under the precondition that the public get their proceeds. State-owned asset management agencies can get access to part of the state-owned capital operation proceeds, but can only use it to expand investment, reform and restructure state-funded enterprises, and so on. State-funded enterprises’proportion of sharing the proceeds and scope of exercising the income right should be limited. Directors, supervisors and senior managers of state-funded enterprises should enjoy the right to share state-owned capital proceeds. Third, several important institutions, such as revenue sharing, professional manager’s income, expenditure of the public’s benefits are demonstrated. Chapter VI brings forward suggestions to improve SCO legislations. After existing legislations are reviewed and assessed, basic principles of regulating SCO by rule of law are laid down and specific proposals for legislation are discussed in detail.