A Preliminary Research Concerning Reduction Of Holding State Stocks: From Legal Perspectives

Part I. Objective of the ResearchIn recent years, reduction of holding state stocks, overall circulation and stock distribution have become the focus as well as the rub of economic reform in China. Owing to historical reasons, the state stocks which resulted from the reform of state-owned enterprises have not been put into market for circulation as a matter of fact. And other non-state stocks such as corporate and natural person stocks have also been stipulated not to circulate in the stock market ever since, thus forming the current situation of stock -holding dispersion. In some ways, the non-circulation of the "Only Big One" —the state stocks has become an obstacle in establishing corporate system, optimal distribution of resources and the balanced operation of national economy. As a result, the reduction of state stocks has become an urgent problem needed to be solved. Nevertheless, after the failure of two trials of reducing the holding of state stocks, the stock market is in concussion and the trials have to be halted. On the other hand, the reduction of holding state stocks must be carried on. The problem is: the binary structure of current stock system. Actually, reduction of holding state stocks, overall circulation and stock distribution are just different aspects of one problem. The progress made in the reform of 2005 stock market is the proof that reduction of holding state stocks is not a dream, based on the experiences of the reform of other countries.