The Research On Reducing State-holding Shares Of Listed Companies In China

China's stock market has come through thick and thin since the Ministry of Finance announced the Government enactment for collecting Social Security Fund by reducing state-holding shares in June 2001,followed by the sharp decrease of the Shanghai and Shenzhen stock index, the great discussion of reducing state-holding shares, and then the stop of reducing state-holding shares in the internal stock market announced by the State Council.From all these the investors suffered a lot from the policy-maker's mistake. Therefore the investors greatly welcome the corrections made by the government. However, we must be very clear that it is not the end of the problem of reducing state-holding shares; on the contrary, it is only the beginning of reducing state-holding shares. This paper believes that state-holding shares must be reduced in accordance with economic development, the reform of corporation governance and stock market development.Nowadays, China's reform of stock equity distribution has performed in a new phase, and many listed companies have finished their reform progress. Under such situation, the reducing of state-holding shares would show off many new characteristics. What is the relationship between the two designs in China's security market? As we know, the practices of the reducing of state-holding shares in China's history has been proved to be failures, but we can not then say that we could stop reducing state-holding shares in China's listed companies, or to solve the problem of stock equity distribution instead of it, for they are two different questions. It is most mportant for us to figure out the differences between the two things, and it is important either for us to know the inherent similiarity.Reducing state-holding shares is very important for China's security market; it could help us to develop our market in a more scientific and benign way. This paper makes a detailed study of reducing state-holding shares and the problems of non-tradable shares in China's stock market through case analysis, comparison study and experimental study, with the hope of finding out the optimal scheme for solving the problem of non-tradable shares.Chapter one in this paper briefly reviews the discussion and the testing practices of the reduction of state-holding shares since the Party's congress in September, 1999,analyses the reason why the Government enactment–The regulatory Scheme For Collecting Social Security Fund By Reducing the State-Holding Shares (Provisional)—fails to work, and explains the necessity of re-solving the problem of state-holding shares and non-tradable shares. In this section some basic solutions and principles are proposed on the issues of state-holding shares.Chapter two analyses the structure of state-owned industries, either of foreign industries or China's industries, based on which we do some detailed experimental study and provide the conclusion.Chapter three makes comparative studies and case-analysis of the alternative solutions for the problem of state-holding shares outside the nation, and then sums up the worthy experiences and lessons.Chapter four mainly presents a major scheme to solve the above problems by transferring state-holding shares and then paying for the tradability, and for all these provides a particular scheme-design demonstration and comprehensive evaluation.This paper believes that the problem of state-holding shares still exists by now. Therefore, the author presents a major and workable scheme to solve the problem based on domestic and foreign experience of reducing state-holding shares, that is, solving the state-holding shares problem in domestic stock market by a way of distribution-sale model, to optimize the distribution of market resources, and then solving the non-tradable-share problem in accordance with the improvement of the achievements made by the corporations and the further development of the security market.