The Research Of Golden Share System

Golden share system, which was brought out along with the privatization of state-owned enterprises, may very likely to be unknown to a majority of people. China started the privatized reform of the state-owned enterprises since the end of the 20th century with an aim to tackle the problems incurred by implementing the planned economy. Several programmers were designed and introduced accordingly in the course of keeping up the national security and societal stability; of which golden share was an emerging mechanism that attempts to ensure the security of country as well as the public welfare. This system is of great significance to figure out the problem of controllability in the process of privatization and works perfectly in balancing and coordinating the conflict between a nation's control force and the independent operation of enterprises after privatization settled down, which corresponds to the economy law that deals with market failure and government failure. Europe, as the cradle of gold share system, underwent relative mature development of and made completely thorough research on it. Along with swift development and widely implementation of it, the European Commission has gradually realized the serious hamper led by lack of strict policy to regulate gold share system within the European Commission and in the world and violation to the basic freedom stipulated in the European Communities Treaty. The European Commission sues its member countries to the European Court of Justice for a series of violations to the Treaty in aims to effectively regulate gold share system and guild its members to set it on a right pavement and in a proper range. China is not mature in establishment of gold share system just after adopting it in reform of transformation several medium and small state-owned enterprises to private enterprises, due to lack of effective laws and regulations. Shortcomings are exposed during the establishment period. Three fundamental principles are offered in the paper after analysis of the European Law of Justice's sentence and laws and regulations related to gold share system in European countries:proportion principle, certainty principle, and non-discrimination principle. The sound operation of gold share system should be secured by strict terms written in laws and regulations about the application scope, right of execution subject and content, time limitation, and transformed and equipped relief mechanism.