| Ever since China adopted reform and opening-up policy, its national economy has been increasingly diversified, but state ownership still remains as a dominant factorin the national economy and plays a decisive role in the state economy growth. State-owned enterprises (SOEs) represent the leading force of the state's public ownership and they have made gratifying achievements in the past twenty years and have provided a lot of constructive experience and approach for the furtherdeepening of SOEs reform. However, currently a number of problems still hinder the reform and development of SOEs, and such problems as excessively high liability ratio, low efficiency, serious shortage of funds and stagnant management mechanism need to be resolved quickly. Releasing SOEs difficulties .has become a key task in the course of the development of the national economy and Chinese government has stressed that the SOEs' problems must be resolved in three years.How to effectively improve SOEs' condition and push forward their reform? Many experts have revealed their theory and methods. The argument that to promote SOEs reform through cultivating and developing capital market has become the focus of theoretic discussion. Comrade Deng Xiaoping has pointed out that finance is the core of modern economy. Developing market-driven economy and especially capital market is a way that SOEs reform will have to take. Capital market is a marketplace for enterprises to acquire long-term funds, which consists of stock market and bond market and etc. Therefore, the thesis focuses on stockmarket when discussing the function of capital market in promoting SOEs reform.The thesis starts from analysis of the problems that SOEs are facing and discloses the cause of the problems. Then follows the discussion of the function of capital market (stock market) and its role in promoting SOEs reform. On this basis, analysis the current problems and inefficiency in the development of the capital market in China. Finally, a conclusion is reached on the .basis of a thorough analysis of problems and concrete measures are suggested to further develop capital market. So, the purpose of the thesis is reached - to supply practicable measures for SOEs reform operation.Nowadays, the problems that SOEs are facing include the following. Firstly, overload debts, which is reflected in two aspects, excessively high ratio of liability to assets and high percentage of non-performing assets. These two aspects are interrelated. After Chinese government adopted a "change treasury fund allocation to bank loan" policy starting from 1983, SOEs had to obtain funds fromstate-owned banks for project construction and technical transformation. Low efficiency of SOEs brought about serious losses and the enterprises had to borrow more new loans to repay the past loans. This vicious cycle has resulted in huge amount of bank debts to SOEs with the average level exceeding 80%. The second problem is severe shortage of capital. Most of the SOEs obtain funds from state-owned banks, which has greatly weakened their ability to shield against risks .Thirdly, it is common that SOEs make investments and constructions repeatedly and purposelessly. This has led to tremendous waste of state-owned assets. A great number of SOEs have no potential for expending production and they have to declare bankruptcy.The above mentioned problems resulted from a variety of reasons, including both malpractice of the obsolete economic system and defects in enterprise' s management. Currently two major theories are prevailing on the cause of SOEs losses - "argument of excessive debts" and "argument of improper financing structure" . In the author' s opinion, both of the two viewpoints are partially wrong and fail to catch the essence of the problems. High liability ratio will not necessarily led to huge losses to enterprise and indirect financing may not necessarily result in low efficiency. The essential reason for SOEs ' problems lies in poor management of enterprise related to th... |
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