Problems In The Reform Of State-owned Enterprises In Gansu Province And Solutions

The state-owned enterprises are in a leading position the national economy in China, especially so in Gansu Province, where the economic and social development in Gansu depends heavily on the state-owned enterprises because the unfavorable location, poor infrastructure and foul natural environment hinder the development of a sound and mature environment for private economy. To ensure a sound operation mechanism and scientific development of the state-owned enterprises, they need to be constantly reformed. Since the reform and opening up policy was implemented in 1978, China's state-owned enterprise reform has made great achievements. Specifically, the total number is significantly decreased, while the total national assets value is on a phenomenal rise, economic returns see a major improvement, and the competiveness is greatly enhanced. However, the problems caused by lack of supporting policies, poor policy implementation and improper operation are equally threatening, which has aroused concerns from the public.Thanks to relentless efforts in many years, especially after the new national asset supervision mechanism was established in 2004, the state-owned enterprise in Gansu province, as a whole, has been saved from the problematic traditional supervision and management model and is developing in a healthy and rapid way. However, the economic returns, scale and operation of the state-owned enterprises are greatly unbalanced because of location difference, unsound supervision system and modern enterprise system. Finding solutions to these problems are crucial and essential for the sound and sustainable development of Gansu.This paper briefly reviews the history of the state-owned enterprise reform in China. Based on data analysis, the overall situation of the state-owned enterprises in Gansu province was firstly analyzed to list the achievements since the new national asset regulatory system is established. Problems existing include chaotic supervision mechanism, problematic corporate management structure, poor economic returns from limited operation scale, etc. Under the guidance of related policies enforced by the Central Government, and with consideration of the realities of disadvantaged location and economic situation in Gansu Province, three solutions are proposed, i.e., improving the state-owned assets supervision mechanism within the existing framework, perfecting the corporate governance structure, and accelerating the equity diversification process, to provide theoretic guidance and reference for future reform of the state-owned enterprises in Gansu province.