Study Of State-owned Shares In China

This thesis is concerned with the circulation of China's state-owned stocks. Current China's stock-market is premature, one of the reasons is that state-owned stocks and entity-owned stocks, the most significant two components of corporate capital stocks, are forbidden to trade on stock-market. This abnormal capital structure and inner-generated over-speculation in China's stock market hold back the improvement of corporate administrative structures. Therefore, to resolve problems of state-owned stocks is extremely imperative. The vast amount of state-owned stocks' coming into market is undoubtedly to impact, directly or indirectly, on stock market. How to achieve the goal that state-owned stocks circulate in stock market with interests of every aspect considered is the key to solve state-owned stocks' being blended with and circulating with common stocks. At the end of this thesis, various modes to achieve this goal are classified and then discussed separately, trying to provide its own idea on arrangement for state-owned stocks to come into market.This thesis is divided into four chapters, discoursing systematically upon the origin, essence, issues and solutions of the problem concerned with state-owned stocks. The first chapter, discussing the historical origin of such a problem and the necessity to research it, is the foundation of the research on state-owned stocks. The first section of this chapter focuses on the historical background of forbidding state-owned stocks to be traded. To maintain socialist public owning system dominant situation and to protect state-owned assets from being violated, state-owned stocks were forbidden to trade in stock market. And the second section digs into the transformation of policy of state-owned stocks problems. It is a trend that liquidity of state-owned stocks is increasing. The third section analyzes the imperative of state-owned stocks' coming into stock-market. This section concerns negative effect of forbidding state-owned stocks to circulate in stock market. Compared with corporations under the modern enterprise system, agent-proxy relations of state-owned economy are more complicated. At present employing capital markets pricing system and corporate take-over system to stimulate and restrict manager staffs, and avoiding the insider control make a practical difference in effective corporate administration. Absolutely a large proportion of state-owned shares and the situation that state-owned stocks are forbidden to circulate, however, result in obstacle to stock market's provision functionality. Artificially divided capital structures generate speculative feature of China's stock market. Prices of stocks do not reveal real corporate operating situation, corporate manager layers lack motives to maintain corporate identity and to protect interests of small shareholders, and other investors cannot manipulate corporate operating by market acquisition. Therefore, the key to resolve this problem is to impel state-owned stocks to circulate in stock market, thus optimizing corporate capital structures.The second chapter analyzes empirically current circulation of state-owned stocks. The first section of this chapter generally describes present situation of the circulation of state-owned stocks. The second section focuses on the effect of movement of state-owned stocks. The transfer of state-owned stocks usually leads to alteration of primary stockholders. Moreover, such transfer diversifies primary stockholders' control to the corporation. The more shares a corporation holds, the more transfer diversifies its control. Nevertheless, data illustrates that state-owned stocks dominated frozen capital structure gets in way to improvement of effectiveness of corporate operating. The third section analyzes modes of transfer of state-owned stocks. 1) Uncharged transfer; 2) Charged transfer. Involving too much government interference, both modes are not real market circulation, causing related enterprises to lack motives of capital operations. Empirical analysis in this chapt...