The Research Of Corporate Governance Mechanism About Chinese Joint-venture Railways

Joint-venture railway raises a lot of money for China railway construction, raise the level of transport capacity of the railway and promote development of economic. Although the Ministry of Railways claim that the joint venture railway project must implement project legal system, but most of joint-venture railway companies'external and internal governance mechanisms are not perfect. Especially, it has competition with national railway in the external market and is controlled by the state-owned major shareholder. Its decision-making, supervision, incentives can not guarantee all shareholders'interests. It seriously hurts the confidence of investors. This paper establishes a corporate governance mechanism of joint-venture railway model in the competitive market based on the over property rights theory and corporate governance theory. It analyzes that how to improve the governance mechanisms of joint-venture railways in the competition with the national railway and how to establish the agency relationship to prevent the major shareholder's control.There are two competitors in the railway market, national railway and joint-venture railway.The corporate governance mechanisms have been simplified as managers gain profit incentive, selection mechanism of the manager and financial mechanisms. Enterprises improve their governance structure in order to not be eliminated. An ideal joint-venture railway company's governance mechanisms should be:strong competition and incentive in positions; competition in the market; financial transparency; adequate funds, manager selection mechanism has a competitive advantage; shareholder behavior is specification and commercial; there is no non-commercial interference.According to the following results of model, the ways to improve corporate governance of joint-venture railways ways are:the Ministry of Railways can establish a joint-venture railways asset management company specially. It can be on behalf of the Ministry of Railways to investment and clears property rights. Regulate related transactions between state-owned railway and joint-venture railways in order to compete fairly. In addition, building the professional manager system, strengthening the competitive mechanism of manager's employ and strengthening the equity incentive are also important.