Research On The Transformation And Development Of Modernized China Production Circulation Enterprises

Production circulation enterprises are operating wholesale, retail and logisticsbusiness of raw materials, fuel, machinery, equipment, instruments and tools whichare required by social reproduction. They play a more and more important role innational economic operation as the great development of China’s economy.This paper first summarizes several adverse effects on production circulationenterprises, such as low industry concentration, low circulation efficiency, barely fewbusiness models, a low level of technique in competition and non-raised position inindustrial chain. By multiple linear regression method, the influence of internal andexternal factors on production circulation enterprises has been quantitativelyanalyzed.In chapter3and4, all vertical integration, horizontal integration and mixedintegration of industrial chain have their own characteristics, but choosing a properone is the key to a better future of production circulation enterprises. In the empiricalanalysis, China Minmetals and Pang Da Automobile Trade Group from China,Glencore International AG and SHV Holdings N.V. from Europe and five tradingcompanies from Japanese are chosen. By learning the experience of transformationand development, several suggestions have been made for China’s productionmaterials circulation industry: to enhance the enterprises’ profitability, to figure outthe value redistribution in the industrial chain and to actively participate in theintegration of industrial chain, to innovate business models and to strengthenenterprises’ management.Subsequently, the decision-making process of the integration of productioncirculation enterprises is studied in chapter5. It is believed that the discount method ismore scientific and reasonable to the non-analysis method. Then the real optionmethod is introduced to the investment decision-making process. Its feature is theembodiment of assets uncertainty and is able to reveal the potential profit of projectinvestment. The single-factor sensitive analysis suggests that the effects of the factorscan be divided into positive and negative. As the factors vary from slightly to widely,the variation of the real option value in multi-factor sensitive analysis is bigger thanthe sum of that in single-factor analysis at first, then becomes gradually less than thesum of that.Finally, it is proposed that China’s modernized system of production circulation canbe achieved by issuing effective macro policies and economic principles andself-perfect of production circulation enterprises.