Corporate Governance And Perfection Of State-owned Enterprises

After the third session of eleventh CCCP plenum, China saw a thorough economic reform, which was full of complex contradiction against the traditional system. The economic system in China has been changing from planned economy to market economy, and getting better with adjustment and perfection. State-owned enterprises in China are changing from producing units for government under the planned economy into competition subjects in market economy. Compared to stated-owned enterprises, none-state-owned enterprises seem to be of more potential of growth and development. More and more exploration and thinking on the legal theories in this regard, therefore, have been made. Corporate governance, inter alia, gains much attention from both theorists and entrepreneurs. However, most discussion does not really concern the state-owned enterprises due to the theoretical barrier of ownership thereof. So it is not surprising that it could not offer much help for changing the mess situation in the corporate governance of state-owned enterprises.It is no doubt that there are plenty of problems in the current corporate governance of state-owned enterprises. Although the theory of corporate governance structure has been put forward for years, state-owned enterprises did not actually carry it out well. To state-owned enterprises, good corporate governance structure is of importance to solve the problem with their systems and to improve their competitiveness. So it is urgently required to reform the large-scale state-owned enterprises by perfecting corporate governance structure, changing management scheme, diversifying the ownership, and improving stimulating mechanism. On this point, it has been a common understanding all over the country since the 16th Plenum of National People's Congress. At the present stage, the most important thing is to fasten the internal reform of state-owned enterprises and to develop an effective corporate governance structure. We should learn from the successful experiences of other countries so as to build a safe and sufficient modern corporate system with sound separation of powers in general, and to develop certain gap-filling procedures or mechanism in particular for the public sector to deal with, if there is any, the new situation.This paper reviews the different periods of the state-owned enterprises reform and tries to figure out the reasons why it failed. By comparing and contrasting to the relevant experiences in other countries, the author points out the shortfalls of the current Company Law of China. To overcome the various difficulties appeared in the practice with corporate governance of state-owned enterprises, the author offers a solution by underlining the importance of system construction to the correction of inner imbalance of corporate governance structure. It is urgently needed to further the corporate reform by strengthening the external management and perfecting the corporate governance structure so that a sound modern corporate system would be finally established.This paper is divided into four parts. Chapter I introduces the concept of corporate governance and then compares different patterns of corporate governance around the world. It concludes that corporate governance, of and in itself, is a system with the appropriate separation of corporate powers and efficient balance against each part. Its goal is to optimize structural establishment of company limited by shares. All the current patterns of corporate governance face new challenges. Neither of them alone could serve as the best choice for the corporate governance. So we should pool the merits of different patterns to develop a brand-new one so as to protect the interest of shareholders while maximize the company interests.Chapter II reviews the different periods of the state-owned enterprises reform and figures out the reasons why it failed. It also points out the difficulties in the current practice. To solve these problems, the author thinks it important to establish both internal and external stimulating m...