Research On The System Of SOEs' Distribution Of Profits To Public Finance

Since the "12th Five-Year Plan" period,the macroeconomic growth of our country has been continuously declining,the operating costs of the real economy have increased,and the profit ability of enterprises has declined.In order to stabilize economic growth and reduce the burden on enterprises,the State timely introduced the "structural tax reduction" policy represented by "replacing business tax with value-added tax".The combination of the above economic and policy factors inevitably leads to an obvious decline in the growth rate of fiscal revenue in the short term.Since entering the "12th Five-Year Plan" period,the growth rate of China's financial revenue has been declining year by year,from 24.8% of 2011 to 4.5% of2016.At the same time,proactive fiscal policy shoulders a heavy responsibility on the road of completing the building of a moderately prosperous society in all respects,and the expenditure of social security for people's livelihood has increased substantially.Under the contradiction and pressure of reduced revenue and increased expenditures,it is more and more difficult to maintain a balanced fiscal revenue and expenditure.According to the report of Xinhua News Agency,"from 2013 to 2016,the size of the national fiscal deficit rose from1.2 trillion yuan to 2.18 trillion yuan and the deficit rate increased from 2.1% to about 3%".The fiscal deficit risk and pressure on revenue and expenditure continue to increase,which will inevitably affect the function of finance as the foundation and pillar of state governance.Faced with a tight balance between fiscal revenue and expenditure,state-owned enterprises(“SOEs”)should give strong support as reserves for the country's economic resources.However,in recent years,although the distribution relations of government and enterprises in our country has established the reform direction of "co-existence of tax and profit and distribution of after-tax profit to public finance" in accordance with the requirements of the market economy,the overall progress in the reform and improvement of the SOEs' distribution of profit to public finance has been slow and shows the problems of too small scale,too low proportion,too slow growth and lack of system rigidity and so on.The absence of standardized distribution system between government and enterprises has led tonot only failing to effectively support public finance and national construction,but also to breeding a series of problems such as inefficiency,over-investment and structural imbalance,which are widely criticized by public opinion.The 19 th National Congress of the Communist Party of China,based on the historical meeting period of the "two centenary goals”,deploys the reform strategy and development strategy of "two 15-year plan" and comes down in one continuous line with the spirit and requirements of the Third Plenary Session of the 18 th CPC Central Committee in deepening the reform.The distribution of SOEs' profit to public finance,which is connected with SOEs and public finance,is an important means for the state to promote reforms and transformations,therefore,its reform and perfection must focus on and solve the deep-rooted problems.At the macro level,distribution of SOEs' profit to public finance,as an important system in the field of distribution between government and enterprises,its reform and perfection should promote the production relations in the socialist society.At the micro level,the SOEs are the most important undertakers of the reform costs,distribution of SOEs' profit to public finance,as a behavior of profit distribution of enterprise,its reform and perfection are aimed at hedging the cost of SOEs brought about by the transformation and upgrading of the national economy and reducing the burden on the SOEs caused by the reform,so as to promote “cost reduction” of SOEs fundamentally,improve their operating performance and profitability,consolidate the SOEs' mainstay status of the national economy and safeguard the backbone of country and people's interests.The solutions to the above-mentioned two deep-rooted problems require the SOEs to distribute their profits to public finance with regard to "publicity" and "profitability." However,at present,there exists a problem of paying more attention on “profitability” and less attention on “publicity” in the research of this field,which is urgently needed to be improved and perfected.Based on the above background,the study of "system compatibility" and "micro-feasibility" of SOEs' distribution of profit to public finance in this dissertation is the common need to play the foundation and pillar role of public finance in national governance,promote related reforms of SOEs,standardize the distribution of the relationship betweengovernment and enterprises,establish the theoretical basis of SOEs' distribution of profit to public finance,and is also an inevitable need for upgrading and restructuring the national economy under the reform of economic system,the adjustment of social relations of production and new normal.It has theoretical and practical significance.In the aspect of theory,the significance of the study in this dissertation has three points:Firstly,it improves the basic theoretical system and research framework of related research of SOEs' distribution of profit to public finance;Secondly,it enriches and develops the the theory of ownership and income distribution of political economy,which promotes the sinicization and modernization of Marx's economic theory;Finally,it improves and enriches the empirical research methods and empirical evidences of the “micro-feasibility” of SOEs' distribution of profit to public finance.In the aspect of practice,,the significance of the study in this dissertation has four points: Firstly,it is conducive to the implementation of distribution policy of central government of the CPC;Secondly,it is conducive to consolidating and giving full play to the foundation and the pillar role of finance in state governance;Thirdly,it is conducive to promoting the reform of SOEs and the upgrading of SOEs;Fourthly,it is conducive to distributing SOEs' profits to public finance and the practice.Focusing on the theme of "system compatibility" and "micro-feasibility" of SOEs' distribution of profits to public finance,the main contents of this dissertation are divided into nine chapters.The first chapter of this dissertation is “Introduction”.This part introduces the research background,research significance,research methods,main contents and structure,major innovations and shortcomings of carrying out this research.The introduction part primarily serves to the purpose of clarifying the meaning of the dissertation.By pointing out the conception and the main purpose of the dissertation at the beginning and making it possible for the reader to have a general understanding of the subject and content of the dissertation,in order to help the reader to decide whether to conduct further reading.The second chapter of this dissertation is “Literature Review”.In this part,on the onehand,the author introduces the general theoretical research in the field of SOEs' profits distribution,including "Bird-in-hand" Theory,Tax Differential Theory,Dividend Agency Theory and Residual Dividend Theory,which provides theoretical guidance for the subsequent research,and also the author points out that the theory of profits distribution did not pay attention to the role of SOEs' distribution of profits to public finance in promoting the adjustment and perfection of social relations of production at the macro level.On the other hand,the author reviews and sorts out the domestic scholars' research on the SOEs' distribution of profits to public finance,including the necessity and effectiveness of SOEs' distribution of profits to public finance,the scope and proportion of distribution to public finance,the principle and emphasis of expenditure,the budget system and so on.On this basis,the author points out three problems in the domestic related research: firstly,the related research pays more attention to the "profitability" and gives too less attention "publicity";secondly,the related research tends to draw on the existing Western dividend theory and it is hard to get a consistent conclusion;thirdly,it lacks the support of data and empirical analysis on the proportion of profits distribution.The third chapter of this dissertation is the theoretical basis of SOEs' distribution of profits to public finance.Through the introduction and analysis of the relevant theories on the ownership of political economy,this chapter discusses in depth Marx's and Engels' discussion on the public ownership of the socialist means of production and then analyzes the development of the theory of socialism with Chinese characteristics for public ownership and state ownership theory.Based on this,it is pointed out that the SOEs' distribution of profits to public finance,as an economic system in the field of distribution of government and enterprises in our country,is in line with our country's basic economic system and social production relations with public ownership as the mainstay.This laid the theoretical foundation for the dissertation's study of the ‘system compatibility' of the SOEs' distribution of profits to public finance.Through the introduction and analysis of the nature and boundary theory of neoinstitutional economics,property rights theory and corporate governance theory,thischapter first analyzes its adaptability to the "micro-feasibility" of SOEs' distribution of profits to public finance.And based on the theory of business nature and boundaries,transaction cost savings,property allocation and Coase Theorem,and corporate governance in the neoinstitutional economics,it is pointed out that the SOEs' distribution of profits to public finance,as a corporate profit distribution behavior,can play a positive role in saving internal transaction cost and enhancing corporate's own business performance and profitability through the conversion of business objectives,perfection of property rights allocation's structure and improvement of corporate governance.This establishes a theoretical analysis framework for the dissertation's study of "micro-feasibility" of SOEs' distribution of profits to public finance.The fourth chapter is the history and current situation of the SOEs' distribution of profits to public finance.This chapter first introduces and analyzes the historical process of exploring,adjusting and perfecting the relationship between government and enterprises in our country since the Third Plenary Session of the 14 th Central Committee of the Communist Party of China.It is concluded that with the system of market economy and coexistence of tax and profits,the SOEs' distribution of profits to public finance with the characteristic of systemic rigidity is an inevitable trend in the development of our country's distribution relationship between government and enterprises.Then this chapter introduces in detail the system construction and operation status of our country's SOEs' distribution of profits to public finance.After that,this chapter points out the problems of SOEs' distribution of profits to public finance,like low proportion,small scale and slow growth,and analyzes the reasons for the above-mentioned problems in two aspects: working system and institution.The fifth chapter of this dissertation is about the research on the system compatibility of the SOEs' distribution of profits to public finance.In this part,on the one hand,the dissertation points out that the SOEs' distribution of profits to public finance can provide economic conditions and system guarantee,and promote the conversion from mixed ownership to public ownership and "union of individual" ownership so as to promote the perfection of mainstay status of socialist public ownership and basic economic system;On theother hand,this dissertation points out that the SOEs' distribution of profits to public finance can promote the reform of "separation of government and capital" so as to reshape the unique interests appeal of the state-owned enterprises and improve the mainstay position of the market,thus playing the role in perfecting the market economic system.To sum it up,this dissertation discusses the "system compatibility" between the system of SOEs' distribution of profits to public finance and the economic structural reform and social production relations adjustment.The sixth chapter of this dissertation is about the research on the micro-feasibility of the SOEs' distribution of profits to public finance.In this part,this dissertation analyzes and points out: Firstly,the reasonable level of SOEs' distribution of profits to public finance can promote the state-owned enterprises to set up the business goal of "profit maximization",so as to better exert their functions of saving transaction costs;secondly,the reasonable level of SOEs' distribution of profits to public finance can help to promote the diversification of ownership structure of state-owned enterprises,thus reducing the transaction costs caused by the friction of property allocation structure;Finally,the reasonable level of SOEs' distribution of profits to public finance can help to rectify the weakening role which corporate governance of state owned enterprises is playing,so as to reduce the cost of state-owned enterprises agency and other transactions.To sum up the above three aspects,this dissertation discusses the "micro-feasibility" of SOEs' distribution of profits to public finance in reducing the transaction costs of enterprises and enhancing their business performance and profitability.The seventh chapter of this dissertation is an empirical study on the micro-feasibility of SOEs' distribution of profits to public finance.This chapter adopts the modern econometrics research methods to test and prove the conclusion in Chapter 5 that the SOEs' distribution of profits to public finance has "micro-feasibility".This dissertation uses return on total assets(ROA)as the evaluation criteria of state-owned enterprises' profitability,and uses total factor productivity(TFP)as the evaluation criteria of state-owned enterprises' business performance.Descriptive statistics and chart analysis show the mutual relationship between ROA and profit distribution ratio of the sample enterprise in the pattern of inverted U-shaped parabola.Accordingly,this chapter adopts a quadratic function to simulate the mutual parabola relationship between the explained variable ROA and TFP and the explanatory variable as payout ratio.In the regression analysis,the results of parameter estimation and robustness test are all ideal.The results of econometric regression show that there exists inverted U-shaped parabola relationship between the explained variable ROA and TFP and the explanatory variable as payout ratio.On the left side of top of the parabola,ROA and TFP will rise with the increase of the payout ratio,and there is a positive correlation of changes in the same direction.In addition to the above conclusion,this chapter also draws an important inference.Theoretically,there is a critical value of the payout ratio,at which the business performance and profitability reach the optimal value.In this chapter,the calculation of the optimal value of the payout ratio supports to increase the proportion of SOEs' distribution of profits to public finance to over 50%.The eighth chapter of this dissertation is the model of management of foreign state-owned capital and state-owned enterprises' profits payout.Based on the needs of learning from foreign-related practices,this chapter divides the models of foreign state-owned capital management and state-owned enterprise' profits payout into three categories: "centralized model","divided model" and "decentralized model." In the centralized model,this section briefly introduces the history of the development of state-owned enterprises in the United States and the United Kingdom.On this basis,the analysis of the state-owned capital operation in the public sector and the payout of state-owned enterprises' profits through public budgets between the two countries was conducted.In the divided model,this section briefly introduced the history of the evolution of state-owned enterprises in France and Italy.Based on this,it analyzes the establishment of specialized agencies in both countries which lead the state-owned capital operation and the state-owned enterprises' profits payout and it emphasizes the importance of supervision of budget supervision.In the decentralized model,this section mainly introduces the development of Temasek in Singapore.It also analyzes Temasek ' s experience in operating state-owned capital globally and raising the level of state-owned capital income and the payout level of profits of state-owned enterprises throughforeign investment.Based on the above analysis,this section summarizes what China can learn from foreign state-owned capital management and state-owned enterprises' profit payout models,including: budget management by classification,establishment of a three-tier state-owned operating system,rationalization of regulatory supervision by state-owned regulatory agencies,development of sovereign wealth funds and increase the level of profits paid by state-owned enterprises.The nineth chapter of this dissertation is policy recommendations on the perfection of SOEs' distribution of profits to public finance.This chapter first propose the guiding ideology and basic principles for formulating relevant policies recommendations.In connection with the calculation of the optimal value of the payout ratio in Chapter Six,this chapter clearly proposes to raise the proportion of payout profits as total profits of state-owned enterprises to30%,and gradually increase the proportion to above 40%.As to payout ratios for different classification of SOEs,we should once again raise the payout ratios in all grades in the existing "classification system",and gradually raise the highest grade payout ratio to over50% and gradually abolish the exemption grade.According to the fourth chapter of this dissertation,the author analyzes the causes of poor performance of SOEs' distribution of profits to public finance in working system and institution levels,and puts forward the solution of solving the superficial problems of working system and the solution of solving the rooted problems of institution.The main innovations of this dissertation are as follows:Firstly,“New framework”: with the “system compatibility” and “micro-feasibility” as the research theme,drawing on political economics and neoinstitutional economics,this dissertation establishes a new analytical framework of SOEs' distribution of profits to public finance.Before this dissertation,our country's research on SOEs' distribution of profits to public finance lacks the balance between the “publicity” and “profitability”.The relevant researches are mainly based on the reference to and drawing on the mature dividend theory in the West and researching the SOEs' distribution of profits to public finance to pure "profitability" ofprofit distribution issue,while neglecting its “publicity” issue as an economic system in the distributional relationship between the government and enterprises.In response to the above problems,this dissertation takes into account the "publicity" and "profitability" issue of SOEs' distribution of profits to public finance,adopts and draws lessons from the relevant theories of political economy and neoinstitutional economics,and focuses on the "system compatibility" and "micro-feasibility".It does not only study the role of SOEs' distribution of profits to public finance in adjusting and perfecting social production relations,but also study its role in enhancing the operating performance and profitability of SOEs.Thus,it has creatively established a complete and united analytical framework for the research system of SOEs' distribution of profits to public finance.Secondly,“New proof”: Guided by normative analysis and tested and proved by empirical research,this dissertation provides new theoretical basis and empirical proof for the "micro-feasibility" of SOEs' distribution of profits to public finance.Previously,the relevant research of SOEs' distribution of profits to public finance mainly focused on "should pay or not" issue,the issue of “how much to pay” is less involved.On the issue of "should pay or not”,the previous relevant research tends to learn from the analysis of different Western dividend theory and produces a heated debate,and it is difficult to produce a conformance conclusion.On the issue of "how much to pay",the previous relevant research can only give general suggestions with the current policy and lack the support of empirical research.In order to solve the above problems,when studying the issue of “micro-feasibility”of SOEs' distribution of profits to public finance,this dissertation first pays attention to reconciling related arguments from the source of Western theories of profit distribution(neoinstitutional economics),and establishes an united research and analysis framework to guide the normative analysis to reach a conclusive conclusion.On the other hand,this dissertation adopts the method of empirical analysis,with which not only verifies the active role of SOEs' distribution of profits to public finance for enterprises to enhance their business performance and profitability,but also initially determines the reasonable payout ratio of SOEs' distribution of profits to public finance,providing a new theoretical basis and empiricalevidence for the “micro-feasibility” of SOEs' distribution of profits to public finance.Thirdly,“New opinion”: Under the background of the current circumstances of state-owned economy and state-owned enterprises' "cost reduction",raising the distribution level of SOEs' distribution of profits to public finance will not only not increase the burden on enterprises,but also help to reduce the internal costs of enterprises.Previously,some scholars believed that the distribution of SOEs' profits to pubic finance would increase the burden on the enterprises and the operating costs of the enterprises and particularly in the current situation of high cost of SOEs,in order to meet the need of "lowering costs" of SOEs,it should be suspended for the SOEs to distribute their profit to public finance.However,through the normative analysis,this dissertation finds that the most prominent role of "system compatibility",especially the "micro-feasibility" of SOEs' distribution of profits to pubic finance,is to reduce the transaction costs and enhance the efficiency of enterprises.This has also been proved in the follow-up empirical research.Based on the above findings,this dissertation argues that the current policy of "cost reduction" is mainly to reduce the external costs of business operations and the policy effect will enter the marginal declining phase.In the above context,the distribution of SOEs' profits to pubic finance will instead help to reduce internal transaction costs,so as to continue to promote the goal of "cost reduction" of SOEs.This is a new view given by this dissertation on the "cost reduction" role of SOEs' distribution of profits to pubic finance.