The Current Implementation Of ESOP In China

Employee Stock Ownership Plan (ESOP) first took shape in America in the 1950s. It is an employee beneficial plan through which the employee could benefit from a long term perspective from investing in their enterprise; or rather it is an employee-beneficial mechanism for making its employees its shareholders. Due to its unique institutional advantage, ESOP popularized rapidly worldwide in the past half century. This plan becomes relatively mature in some countries. And its sound theories and application show that ESOP holds many unique institutional advantages and great social and economic significance, which is the fundamental reason that ESOP has been successfully practiced in so many countries.In China, the theoretical study and application of ESOP dated from 1980s. In its more than twenty years course of development, we acquired experiences and learned our lessons and now we both face difficulties and cherish hopes. On one hand, the theories and practices show that, the implementation of ESOP have important significance in exploring the forms of public ownership in our socialist market economy, advancing the establishment of modern enterprise system, promoting the macro-economic institutional reform and strategic restructuring of state-owned enterprises, regulating the distribution relations, improving the social security systems, etc. on the other hand, due to various problems that cropped up in its implementation process, ESOP was stopped by the competent authorities in 1998. However, the author doesn't think that it's a good choice to just give up halfway. Rather, under the current situation, we should be fully aware of the importance of ESOP and reflect on and correct our mistakes, and on the basis of that, work out an ESOP which is in accordance with China's national condition and with Chinese characteristics. So that this innovative mechanism of modern enterprise could be successfully carried out in China and realize its above-mentioned significances.The present study focuses on the current implementation of ESOP in China, including the following three points. First, to analyze the practical value of implementing ESOP in China under the new historical circumstance; Second, to summarize and exam the fresh problems which emerges when ESOP is implemented in China at the current stage. And these new problems would be the very"research questions"of my paper, of which partly have not been discussed by the previous relevant studies or have discussed but need further consideration, the rest are possible arise that we face when practicing ESOP under the new historical circumstance. Third,...