The State-owned Enterprises: Optimization Of Corporate Governance In International Operations

A great and lasting progress has been achieved in the Chinese economy since the time China had adopted reform and "open-up policy" . But behind these achievements, there have been two problems, the first being overseas investments as prerequisite for further high growth. However compared with her inward FDI China' s outward FDI is not so good. The second is that as main carrier of her outward FDI the state-owned enterprises are more often than not frustrated in their operation of international markets. Such malpractices often take place as bankruptcies, asset flees, collusion between headquarters and subsidiaries and so on. So, there arises an urgent task for the Chinese Government, i. e. how to curb those malpractices by state-owned enterprises in international markets? In fact, this touches the core of corporate governance, especially under the circumstances of transnational operations.The original ideas of corporate governance can be racked back to Adam Smith, but it was not until 1980s' that ideas caught much attention. Therefore, corporate governance is a new issue actually. So, there has been no matured theory explaining governance mechanism of modern enterprises, especially transnational enterprises. In order to solve these problems, this thesis reviews the existing theories on corporategovernance at first, then discusses uniqueness of the transnational corporate governance and puts forward to a general frame for analysis of transnational corporation governance(i. e., there are seven factors affecting transnational corporate governance mechanism). Then it grasps the pass dependence on Chinese culture by the Chinese state-owned enterprises due to influences of Chinese social traditions. This kind of culture dependence' s has deeply influenced the Chinese state- owned enterprises and their overseas operations, as results many problems occur. Governance mechanism optimization is the solution. So, this thesis draw three different boundaries for the Chinese state- owned enterprises and their transnational operations and generalizes four ways to optimize the governance mechanism in international operations. Meanwhile, this thesis puts forward a "control point" in transnational corporate governance. As a result, this thesis brings forward countermeasures and advices to optimize four governance mechanisms in three boundaries of stated-owned enterprises during their transnational operations.