Circulation Problems Of State-owned Shares Of Listed Companies In China

The establishment of Modern Enterprise System (MES) is one of theimportant objects of state enterprise system reformation in China. Ltd. is thetypical form of MES. As the main place for Ltd. to finance, the stock exchangehas been developed for more than ten years, but its many rules carry Chinesecharacteristic deeply, such as the rule that state owned shares are not allowed togo on the stock exchange. In Western countries, there are state-ownedenterprises too. The governments purchase the share in these enterprises andhave a mature system of managing the state-owned stockholding. Furthermore,the governments negotiate part of state owned shares through different wayssuch as saling on stock exchange to fulfil the policy aims.Beginning with the share structure of Chinese listed company, the paperstudies the circulation of state owned shares from two aspects: theory andauthentic proof. In theoretical aspects, the paper states the present situation ofthe listed company's share structure in detail, studies the negative effects of theregulation that the state owned shares are not allowed to negotiate, and the causeof its, and presents the idea of setting up a new system of managing the stateowned stockholding in China according to Western countries' successfulexperience. Based on the detailed analysis of many circulation models of thestate owned shares, which either have been put into practice or are still indiscussion, the paper points out that the most thorough way to solve the problemis put the state owned shares into market directly. After studying the feasibilityof the state owned shares' listing theoretically, the paper does that quantitatively.To solve the problems incurred by the state owned shares' listing on the price ofSingle Corporation's share, the achievements of listed companies, therelationship of supply and demand in the stock exchange and on the investors,using the regression equation in the Econometric way, the curve of relationshipof supply and demand in Western Economics and the Game Theory. Then thepaper points out releasing 10% of the state owned shares every time will notinfluence the A-stock market very much. A new method to assess the stateowned capital dynamically and statically is also presented in the paper. By usingthis method, the state owned capital could be protected fro-m running off.According to the ration scheme of the state owned shares pllt iflto practice inDec. 1999, the paper device an improved scheme. At last the paper discusses thebasic principles and necessary measures when the state owned shares areallowed to negotiate.