Studies On Legal Issues And Strategies Of Foreign Capital Participating In State-owned Enterprise Asset Reorganization

The state-owned enterprises, whose operating and developing situation directly impact on the healthy of the national economy, are one of the control forces of the national economy and security. SOE encounter the problem of mechanism transformation, thereby to make a profit from deficits, and maintain and increase the value of state assets during their reform process. In recent years, SOE restructuring is newly featured with assets reorganization, integrative strategy of SOE resources and industries, as well as structural adjustments. China is promoting market reform of SOE by introducing diversified overseas and domestic strategic investors, to improve the competence, thereby to form competitive multiple ownership structure. Utilization of foreign capital is a crucial part of China's basic state policy of opening up to the outside world, which entails the introduction of foreign investment into restructuring and reorganization of SOE, especially large and medium sized ones. SOE asset reorganization with introduction of foreign investment not only makes up the insufficient fund, but also optimizes SOE organization structure, adjusts and upgrades industries. Advanced technology brought by foreign investment can help win SOE innovative capability and competitive advantages in global market. Although China has issued polices that encourage and set criteria for foreign investors to participate in SOE asset reorganization, SOE still face with problems due to China's uncompleted legal system. Foreign investors are aiming at taking and increasing market share, or even to become market monopolists, and they are not just coming to help. Therefore, while encouraging foreign capitals'participation in SOE assets reorganization, it's important to recognize legal issues involved, and it's an urgent necessity to build up complete legal system.The thesis with about 33,000 words is divided to four parts.Part one is a summary. Firstly, it explains the concept of SOE and assets restructuring. Then it expounds on the history of foreign capital participating in SOE assets reorganization. Thirdly,five basic ways of SOE restructure with foreign capital are introduced, elaborating on the practical ways including overall acquisition and partial acquisition during the SOE restructuring process. And finally the active and unavoidable negative effects brought about by the reorganization above mentioned are discussed.Part two focuses on the legislative system of foreign capital participating in SOE assets restructuring. Meanwhile, it describes the inner conflicts among these laws and regulations. Laws, regulations and policies concerning foreign capital participating in SOE assets reorganization currently carried out can be sorted into two categories, the basic and the specialized. Between them contradictions exist. For example, according to the"Company Law", it will be a problem that how foreign investor can get SOE's stock legally. Another example, according to "Sino-Foreign Joint Venture Enterprise Law", after SOE transferring shares to foreign investors, whether the new company can enjoy the preferential treatment.Part three lists seven legal issues of foreign capital participating in SOE assets reorganization, including industry access, monopoly, super-national treatment, national economic security, state-owned assets erosion, employee rights and interests protection, disadvantages of governments. It also discusses in detail on status quo of legislation on industry accessibility of foreign capital, the monopoly status of foreign fund in some industries and current legislative defects, the form of super national treatment for foreign capital, the effects to china's economy security and acting legislation and reasons for state owned assets erosion and legislation status of protection of rights and interests of workers and disadvantages of foreign fund attracting activities initiated by government est..Part four gives a response to these seven legal issues and provides a series of policy proposals. For example, legislate a unified law for industrial access of foreign capital, improving"Anti-Unfair Competition Law"and"Anti-Monopoly Law"to prevent the monopoly of foreign investment in China's industries, Construction of the national industrial security system to safeguard national economic security, establishing"State-owned Assets Law"and improving"State-owned Assets Evaluation Management Measures"to prevent the loss of state-owned assets, developing"Compensation Measures to SOE workers"and solving employment of SOE workers by contract, transforming functions and exert market role to prevent the disadvantages of government.