| How to integrate the public ownership and market economy is the key issue of reform of socialist market economy. As the main section of economy based on public ownership, the reform of State-owned Enterprises (SOEs) has been the central issue of the economical mechanism reform in China. Under the request of modern production mode and market economy, the reform of SOEs in past30years is the gradual process during which the path how to integrate the public ownership and market economy efficiently was discussed and explored.Nowadays, under the accumulated impact of profit increasing and scale expanding, as a whole, no matter on the aspect of control capacity in industries or the aspect of the market power, SOEs is playing the important role in Chinese economy and global economy. On the other hand, with the effect of continual merging and expanding, under the combined impact of bundle of risk factors, which includes the internal structural re-configuration and external market risk, the uncertainty of business environment confronted by the large scale SOEs is increasing. Risk of business appears. How to construct the stable risk control mechanism has been one of the important issue of SOEs’ reform.On the other hand, it is important to resolve two interacted problems in the process of the current reform of SOEs in China:Firstly, how to advance the reform of shareholding system and perfect the governance structure consequently in individual SOE. Secondly-how to perfect the State-owned assets supervision system so that the purpose of maintenance and appreciation of assets value could be reached. And how to evaluate and control the risk is the common issue in the process of institutional reform occurred on the mirco-level of individual SOE, and on the marco-level of SOEs’ group. Based on the knowledge, at the same time of equity division reform, integrating the risk evaluation and control into the reform of corporate governance structure, should be either proper strategy of perfecting the corporate governance structure in SOEs, or the correct solution of improving efficiency of state-owned assets.In the process of SOEs’ reform, risk control is a new issue. Relevant theory on risk control of enterprise is probed actively. The occurring problem of the probing is:In theoretical research field, the research of the risk evaluation and control in SOEs is only treated as managerial topic; In the practical field, implementation of the risk evaluation and control is only treated as standard topic. Processing practice occurred in SOEs has the industrial, individual, discretionary features. The risk management adopted in financial field confronts the theoretical and practical handicaps in the process of applying in enterprises.Based on the theory of risk premium in transaction, this paper probes into the issue of evaluation and control of risk in SOEs from two aspects, which includes mirco-level of individual SOE and marco-level of SOEs’group.Three issues are discussed:①How to understand the particularities of risk control in SOEs?②How to construct the common framework of risk control in SOEs so that the safety of state-owned assets can be guaranteed?③How to set up the mechanism of risk control in SOEs so that the efficiency of corporate governance structure can be improved?Applying the methodology of political economy, the analysis of risk control in SOEs in this paper focuses on the governance of risk in SOEs. Two aspects, which includes the mirco-level of individual SOE and marco-level of SOEs’group is discussed. The purposes of this paper as follow:①Reviewing the reform of SOEs on the new perspective, discuss the possible direction of future reform on the foundation of risk control research.②providing new solution for the implementation of risk control in SOEs, more broadly, for the application of risk control in other enterprises.This paper includes6parts:①Preface. Necessary explanation and theoretical preparation was displayed.②"Reviewing and Foundation of Research". Four theoretical reviews, which include reform of SOEs, theory of risk, governance structure and risk control, are displayed and evaluated.③"Bring up the topic:Risk Identification in SOEs" and "Risk Control in Enterprises:a Viewpoint Based on Transaction". Bring up the main topic in the research of risk control in SOEs; analysis the model of risk premium in transaction which is the preparation for next section.④"Risk Control in SOEs:a Political economy analysis". The characteristic of transaction in SOEs is discussed.⑤"Risk Control of Individual SOE:Governance of Risk" and "Risk Control of SOEs Group:Category of Risk and Mechanism of Risk Conduction". By the theoretical analysis and case study, the risk control of individual SOE, category of risk and mechanism of risk conduction are discussed.⑥Epilogue. The conclusion and possible policy implications are displayed.Preface. The background, structure, methodology, main viewpoints, keyword are stated. The main viewpoints of this section include:①Reviewing the reform of SOEs on the new perspective, discuss the possible direction of future reform an the foundation of risk control research.②Three issues:Firstly, How to understand the particularities of risk control in SOEs? Secondly, How to construct the common framework of risk control in SOEs so that the safety of state-owned assets can be guaranteed? Thirdly, how to set up the mechanism of risk control in SOEs so that the efficiency of corporate governance structure can be improved?③Definition of the key word, which includes SOEs, Risk is given and discussed.(1) Reviewing and Foundation of Research. In this section, four theoretical reviews, which includes reform of SOEs, theory of risk, governance structure and risk control, is displayed and evaluated. Main viewpoints includes:①Reform of SOEs. The risk confronted by the SOEs, includes not only the risk management of individual SOE, but also the risk identification and control of SOEs’ group. The internal solution, which considers the risk issue as managerial issue within the boundary of firm, is based on the misunderstanding of risk control. It should be proper to go beyond the boundary of firm, to analysis the risk control of SOEs in boarder political economy framework of research.②Theory of risk. Why and how Knight’s theory of risk and organization should be advanced is discussed.③Governance structure and risk control. The possibilities of advancing the theory of governance structure with risk control are discussed.④Risk Control. The framework of risk management, the tool and methodology applied in risk management practice are displayed and discussed.(2) Bring up the topic:Risk Identification in SOEs. This section analysis the common principle of risk identification and the special features of risk control in SOEs. The main viewpoints include:①Risk control in SOEs should focus on the governance of risk. On the contrary, the risk control of other business should focus on the management of risk, as usually does.②The particularities of risk identification, which includes:Firstly, the external determination of the subject of risk identification; Secondly, the contradiction of the target of risk identification; Thirdly, the limitless of the risk conduction; And fourthly, the integration of risk.③Two aspects of risk control in SOEs, which includes the mirco-level of individual SOE and marco-level of SOEs’ group is discussed.(3) Risk Control in Enterprises:a Viewpoint Based on Transaction. This section probes into the risk premium in transaction on the modeling of gaming that simulates the transaction. The main viewpoints includes:①Any transaction includes two parts, one is the transaction of certain object of transaction, e.g. commodity or services; the other is the transaction and allocation consequently of risk, which is defined as "The risk allocation function of transaction".②The risk premium of transaction means the pricing of the risk by the insiders of transaction who like to diverse or grasp the risk premium.③Firm is the nexus of transactions. The transactions are integrated to decrease, to control the risks and uncertainties, and to win the risk premium of transactions.(4)the reasons why governance structure matters is that governance structure is the basic mechanism to deal with the integrated transaction.⑤the basic solution of risk control includes:Firstly, allocating risk internally and secondly, diversifying risk externally, both in way of transaction.⑥the process of risk conduction could be either diversifying or accumulating, according to the difference and structure of allocation of risk premium.⑦Three factors could work on the mechanism of risk conduction: market, institution and knowledge.(4) Risk Control in SOEs:a Political economy analysis. This section analysis the institutional system of SOEs and its implication on risk control. Main viewpoints includes:①The huge scale of assets of SOEs means its capacity to allocate risk internally is considerable.②The external institutional support system means the capacity of SOEs to diversify risk externally is also considerable.③he function of risk control works or not, is decided by two factors:efficiency of internal institutional platform and external supervision system.④The risk control of SOEs is not just the pure managerial issue, but the issue of governance of risk.⑤it is necessary to control the transition during which the risk in individual SOE change into national risk.(5) Risk Control of Individual SOE:Governance of Risk. This section describes the latest situation of governance and risk control in SOEs. Main viewpoints includes:①although the reform of shareholding system has settle down the path of the governance reform in SOEs, the traditional management system in SOEs still matters.②The risk control in SOEs nowadays has no proper platform of governance structure, on which the diversification and allocation of risk can be carried on.③whether the employee, managers, external investors(domestic or foreign), cannot afford the role of diversifying risk.①The main handicap that impact the governance of risk in SOEs is that the capacity of affording risk and power of involving risk decision cannot match.⑤The main category of risk in individual SOE includes:Subject-missing risk; Administratization risk of pricing mechanism in internal transaction; Internal risk mismatch; risk of insulation.(6) Risk Control of SOEs Group:Category of Risk and Mechanism of Risk Conduction. This section analysises the category of marco-risk confronted by SOEs’ group and the mechanism of risk conduction. Main viewpoints includes:①the category of macro-risk should be focused include:political risk, financial risk, industrial risk.②The possible cut-off insititutions includes:institution of firm, supervision system, government industrial policy and publicity.③Three important tendency:it is necessary to supervise the individual SOE’s political risk, financial risk and industrial risk transform into the national risk and economic imbalance.This paper may be an important innovation in accordance with the degree of severity of light arranged mainly in the following four aspects:(1) Topic and System innovation. Topic:Introducing the practice of risk management in SOEs into research and practice of the reform of SOEs, and systematically analyzing the current issue of the reform on the perspective of risk controlling. System:Although the research in this paper hasn’t been developed too far, but the research on the risk premium with the modeling of transaction, and the research of risk diversification and conduction is the development of Knight’s theory of risk, the basic definition(risk allocation of transaction, risk premium), methodology (applying theory of option into the field of pricing of transaction)and perspective(uncertainty) is quiet different with the theory of firm which is based on the definition of transaction cost.(2) Perspective Innovation. Three possible perspective innovation includes:①re-considering the reform of SOEs from the perspective of risk control.②Rather managerial approach, than economic theoretical approach, is adopted in this paper to analysis the risk control in SOEs.③Rather relying on the current theory of risk, than exploring new framework, the risk control of SOEs is analysised.System innovation.(3) New viewpoints (Theoretical Section):Any transaction includes two parts, one is the transaction of certain object of transaction, e.g. commodity or services; the other is the transaction and allocation consequently of risk, which is defined as "the risk allocation function of transaction"; The risk premium of transaction, which means the pricing of the risk by the insiders of transaction who likes to diverse or grasp the risk premium; Firm is the nexus of transactions. The transactions are integrated to decrease, to control the risks and uncertainties, and to win the risk premium of transactions.(4) New viewpoints (Application Section):The particularities of risk identification, which includes:Firstly, the external determination of the subject of risk identification; Secondly, the contradiction of the target of risk identification; Thirdly, the limitless of the risk conduction; And fourthly, the integration of risk. Two aspects of risk control in SOEs include the mirco-level of individual SOE and marco-level of SOEs’ group. Whether the employee, managers, external investors(domestic or foreign) in SOEs, cannot afford the role of diversifying risk. The main handicap that impacts the governance of risk in SOEs is that the capacity of affording risk and power of involving risk decision cannot match. |
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