Institutional Change In The Financial Restructuring - On The "debt"

This paper focuses on explaining and predicting the 慸ebt-equity-swap? (DES) policy. DES policy was set to relax the debt crisis of Chinese state- owned-enterprise (SOE) and the bad-assets in state-owned-bank. By analyzing the change of the SOE抯 capital structure and the corporate governance that marked with status quo insider control, the reason of the crisis is that the latter does not match with the former. This shows the property rights system of the SOE should be changed. Under the present circumstance, the property rights system will not change itself, the competitions are the driving forces behind the change. The competitions demand the building of the enterprise entering and withdraw system. Decentralization, which introduced by Chinese economic reform, made the enterprise entering becoming easy, but the withdraw of the big SOEs is not so easy as of the small SOEs. Different with the single enterprise restructure in mature market economic, the DES policy, one of systemic financial restructure under institutional change, must act as the system which enterprises can enter and withdraw easily by this way. Most difficulties of withdraw were caused by the government control of the entering, So the healthy withdraw of big SOEs demands the public goods which should be provided by government, such as laws and rules, capital markets, manager markets.