Longteng Company Coming Out Of Difficult Position

Longteng Company is a state owned enterprise (SOE), which has been in very bad financial situation for running due to its managerial system and the unsuitable strategy and it sited heavy on. With the reform of planning economy of China, it is coming out from depending on the favorable policy issued by state for running by implementing the budget management and managerial reform. It should be said that there were a number of problems in the reform of the company, and these problems would come forth when the reform take place in other SOEs. It is pointed out that the difficult situation of running in SOE result from the system of itself, therefore, at the present, there is only one way to develop SOE breaking through the old system of SOE. It has been tried to find a way suited for developing the big or medium SOEs and domestic industry in this case study.In this case study, by reviewing the history of Longteng company reform and studying how it implement budget management and transfer managerial system, the problems coming forth in the reform of SOE have been found, the procedure of reform and the solution of resolving these problems have been chosen, and the way to make SOE out of difficult position and develop healthily has been determined. It is pointed out that reform is the only way for enterprise to survive and develop in this article. The case study may show a good example for other SOE's reform.Finally, it has given strategic and financial objectives for SOE to develop healthily by merging and making acquisition and recombining assets in the market, and financing in the capital market.