Research On The Investment Climate Of China's SOES

The China's state-owned enterprises (short for SOES) reform has achieved great progress since 1978, but its problem is also outstanding. The thinking of reform measures, such as mere power extending and interest reducing, contracting out system and the share-holding system on a trial basis, in fact does not involve following problems: the change of property rights system , the establishment of company governance , the constructing of fairly competitive market environment and the interests protection of state-owned property rights , which results in transforming the research emphasis from external policy regulation to essential institutional innovation . This paper analyses the advancement problems of SOES from the angle of investment climate (mainly in the institution climate). The aim of improving SOES' investment climate is to protect the rights and interests of state capital, restrain managers' opportunist behavior and assert rights of the small shareholders and staffs , thus accelerate SOES' wholesome development. This paper consists five parts.This first part is the introduction. It briefly interprets the research background, present research situation, main thinking and methods, as well as the research prerequisite that contains the historical development and reform processes of SOES, and the limitation of relative conceptions. The fundamental theories are as follows: (l)the annotations to "Institution" in the New Institution Economics; (2)the research achievements about property rights , principal-agent relation , agent problem , corporate governance and capital structure in the modern firm theory; (3)the last achievements in the investment climate study, which provide a flame to the SOES investment climate study.The second part deals with the comparison of SOES between China and western countries. The difference is in three aspects: (1) the financial condition in SOES' founding period ; (2)the according theory ; (3)the firm system and the control mechanism by government. In conclusion, SOES' are special firms in western countries, while are common ones in China.inThe third part deals with the analysis to the investment climate development of China's SOES. After analyzing the traditional SOBS' investment climate elements and changes of economic climate in reform processes, four institutional problem are put emphasis on. (1)A mixture of government administration and enterprise management is impossible under state-ownership; (2)The state ownership control is invalid; (3) The insider control problem is serious ; (4)The capital structure has defects and the state-owned creditor's rights is in soft control.The fourth part makes improvement countermeasures to the China' SOES investment climate. It points out that three aspects should be carried out together, which consists of the property rights system reform, valid company governance and creating fairly competitive market environment. For that, the specific measures are as follows: (l)SOES should be classified to reform. On the basis of rationalizing the state-owned capital's belongingness relation, the special SOES could maintain original operating pattern, and most common SOES could chose the non-nationalization way; (2)Choose the joint governance modal to construct a investment climate fit for SOES' development by perfecting the inspiring mechanism for managers , internal monitor mode , external market control and law control mechanism, combining with the economic ethics and the company culture building .The last part is the conclusion.