The Trend Of State-owned Enterprises' Reform:An Analysis Based On Governments' Cost-benefit

State-enterses' reform has been being the focus ofTheorists.Among the papers on the state-owned enterprises' reform in the past 22years. few have analyzed the whole course of the reform historically andsystematically. Many profound issue have not been probed or given enoughattention to, e.g., (l) how did the state-owned enterprises' reform begin and whydid the government choose to reform them in the late 1970s?(2) what is thegovernment's principal impetus to promote the reform? (3) what are the trend andmain factors that have influenced the reform for over 20 years?, etc. Obviously,only a general description is for from enough to answer these problems. Thispaper based on the analysis of the government's cost-benefit, expounds andproves the above issues.In the course of the state-owned enterprises' reform, as the agent of theowner the government plays a unique role-it is the advocate, the participant andthe for of the regulation-because the reform is closely related to itsbenefits (cost-benefit).The main costs that the government invests in the state-owned enterprisesinclude agency costs, the costs of financial investment and the costs of financialcredit investment. The vast total investment by the government was ascending insome particular phases of the reform. Correspondingly the government's mainbenefits from the state enterprises are their contribution to the financial revenueand GDP Which is rather low if compared with the vast state assets and has beendescending since the reform began.So, in order to protect its benefits, the government will the its efforts todeepen and widen the reform of the state enterprises to accelerate the change ofthe be enterprise system if its benefits (rate of return) getting from thembecomes fairly small part of its total benefits, till the state enterprises become themicroeconomic subjects of the socialist market economy in real sense.