Debt Policy And Deepen The Reform Of State-owned Enterprises

This theme intends to discuss how to regularize and restrict state-owned enterprises managers' and owners' behave effectively by meansof building perfect system, which should be helpful for enterprises toenhance energy and raise efficiency. The text is divided into fivechapters' the first is the analysis of debt-for-equity swap policy. Thesecond is the analysis of the root of state-owned enterprises falling intodebt rattrap. The third is to analyze the managers' behaviors and bringforward related reform advice. The fourth is to discuss the propertyright of state-owned enterprises and related reform steps. The last is toexplain the relativity of the state-owned enterprise refOrm.At present debt-for-equity swap as a temporary policy acts aspositive effect fOr our economy, which can not only release state-ownedenterprises from heavy interest burden but also reduce bad assets ratioof banks and be helpful for defending financial risk. But we should seethe related negative effect: On the one hand, it will weaken the debtrestriction to the enterPrises and maybe save some state-ownedenterprises which should be washed out because of low efficiency.This will lead to further waste of social wealth. On the other hand itis very difficult to execute smoothly and the most important role state-owned assets management enterprises themselves exist fatheringstructure problems. Furthermore, our capital market is still far awayfrom perfect. Therefore, it is very uncertain that debt-for-equity swapcan achieve the expected purpose.The most important reason why our state-owned enterprises fallinto debt rattrap is that their investment scale exceeds the reasonablelevel that should be fit for their self accumulation. Unfortunately lots ofinvestments are lack of efficiency, which results in heavy interestburden for enterprises.The managers of state-owned enterprises haven't reasonablemoney income and pursue the power income as possible as they can.They have strong impulse of investment and expansion. But they areonly responsible for the poor limited liability and even nothing becausethe lack of the effective restricting and monitoring of report mechanism.To build perfect report mechanism is very vital for the management anddevelopment of enterprises. Furthermore, the managers of state-ownedenterprises are short of enough motive to do the businesses for the longterm benefit of the enterprises because they themselves are temporarymanagers and their tenure decided not only by how much they earn forthe enterprises. The above changes must be done on the conditions ofthe reform of property right.The low efficiency of state-owned enterprises can be thought of asa kind of market failure for the negative externalism. A kind ofeffective solution is to regroup the property right. Our state-ownedeconomy should "do something and not do something", should exitfrom competitive regions. The debt-for-equity swap should beaccompanied by the existence of the state from the enterprises. People-owned enterprises as the successors to state-owned enterprises shouldbe carefully treated and brought up. Our policy and capital marketshould be more open and give them more room to develop. State-ownedenterprises' change should follow the policy"from little to big, firsteasy then difficult" and the function of capital market be exerted to theutmost. We can take the material way such as MBO, coming into themarket according to the material conditions of different enterprises.State-owned stocks' mobilization is very important process and shouldadopt marketlization way to execute. Open-fund will play importantrole in the capital market and be heIpful for the mobilization of state-owned stocks. But we must reinforce the building of related law andreally protect the benefit of common investors. The perfect reportmechanism will also monitor the funds' reasonable and legal running.In a word, the reform...