The Research Of Investment And Financing Of Prison Enterprises After Reform

The prison was generated as a result of the country. It is the machine to show the state coercive power. The prison is a political category. Prison Enterprises are an important part of the prison. It provides work sites and jobs for the rehabilitation of offenders. Each prison performs the functions of enforcement authority of the state and assumes the business of the Prison Enterprise. Before Yunnan prison reform begin widely, this paper focuses on the requirements of separation of enterprise from prisons, prison system reform and the financial system innovation. In order to promote the prison economy to be a sustainable development, this paper analyzes the issues of investment and financing of prison enterprises. Not only has it theoretical value, but also it has practical significance.The rehabilitation of offenders of our country has two aspects of regulatory education reform and labor reform. The main content of the labor reform is that the prison enterprises provide jobs for the criminals and organize criminals to labor. Through the production and management of the prison enterprises, a part of profit is used to make up the lack of prison funds to support the operation and development of the prison. Many contradictions are found in the management of no separation of enterprises from prisons during operation. On the one hand, management of the prison is unclear, the market position is unknown, and the prison can not operate independently and self-financing, can not meet the requirements of the development of market economy. On the other hand, It is the major obstacle to restrict the prison’s functions and to improve performance that the management mode of no separation of enterprises from prisons. Even it is dislocation of the statutory functions of rehabilitation of offenders in prisons. Therefore, the implementation of prison reform in the prison is a necessary requirement of the prison management. It is a very important and urgent task now. In order to change the situation of the functions fading away from the essential attribute in the prison reform, cut off the market rules’penetration and influence on the prison law enforcement activities, prevent corruption in the judiciary effectively, ensure exercise of the functions of punishment properly, Ministry of Justice started the work of the prison reform in six provinces and cities from January 2003. It extended to 12 provinces and cities in 2004. June 2008, the prison management system got throughout the country gradually.It is not only the goal of prison reform of the CPC Central Committee and State Council, but also the basic framework of the new prison management system that the system is used that the management of execution of punishment separates from production management, the expenditures of law enforcement separates from the prison production income, to gradually realize the goal of prison and enterprise system reform that full protection, separation of enterprise from prisons, separation of income from expenditure, the normal operation. Now prisons have dual task of sentence enforcement and production,prison enterprises will separate from prisons through prison reform. Prisons Enterprises should set up state-owned enterprises which will be in the provincial domain, the parent company structure and the group of the limited liability company. Thus, prisons and prison enterprises will carry out their functions. Bureau of Prisons and the state-owned (Group) companies of the prison system are solely holding companies. Prisons and prison enterprises will operate orderly when the various subsidiaries clarify their respective responsibilities, as well as the various prisons, and it is ensured that prison enterprises separate from prisons.Yunnan Province will gradually expand the prison reform. It will provide strong policies for the depth reform and promoting development that prison enterprises have statutory preferential policies as the country’s special enterprises. The reform of separation of enterprise from prisons creates the preconditions for integration into society, market economy and industrial clusters of state support of prison enterprises and the implementation of enterprise system reform. After the prison reform, prison enterprises will establish a modern enterprise system and become the real business entities. They will adapt to the enterprise legal system which practices with the market economy. It is that "manage their own businesses, self-development, self-restraint" and "property rights clearly established, defined power and responsibility, separation of enterprises from management, scientific management". The ways of their investment and financing will face tremendous opportunities and challenges. To face the new developments, we have to think that what are the positions of the prison enterprises after prison reform, how to solve the new problems of financial management of prison enterprises, which measure should be taken during investment decision-making process, how to broaden the financing channels to address the shortage of funds. If the major theoretical and practical problems are not addressed, the production and operation of prisons will be affected.This article focuses on prison reform and great changes of the financial system after prison enterprises establish a modern enterprise system. It explored the suitable theoretical framework of prison enterprises investment after reform and proposed some measures to solve the shortage of enterprises funds and broaden financing channels for prison enterprises.The thesis is divided into six parts:The first part is the introduction. It includes the research background and purpose. In this part, the problems and some ideas to solve the problems are proposed.In the second part, firstly, the difference between prison enterprises and the common enterprises is described. Secondly, there are outstanding common problems during prison enterprises investment and financing. And it analyzes the causes deeply.In the third part, this paper says that the reform of separation of enterprises from prisons is the way to solve the plight of prison enterprises investment and financing. This part also describes the specific content and steps of the prison reform work of the State Council. In addition, the prison reform will promote financial management, and broaden innovation in the system concepts, system relations and Institution in.The fourth part is the focus of the paper. Firstly, this part analyzes the major changes of prison enterprises invest in diversification and the channels and significance to achieve a wide range after prison reform. Secondly, this part explores the theoretical framework which is suit for prison enterprises’investment decisions in the case of investment of Jinma Machinery General Factory in Yunnan. Prison enterprises should seize the opportunity and study investment direction, investment procedures, investment vehicles and investment carefully. They also should regulate the project access system, develop the two outside labor economy, link to stronger to develop production and processing projects, explore a variety of investment cooperation actively, increase the technological innovation and R & D investment of advantage programs, develop strategies to strengthen horizontal cooperation, promote large-scale operation, and establish exit mechanism of investment projects.The fifth part is also the focus of the paper. Firstly, this part analyzes the opportunities and challenges of prison enterprises’financing after prison reform. Secondly, this part proposes measures to broaden financing channels of prison enterprises. Prison enterprises have become the market players through the establishment of modern enterprise system. Prison enterprises will say goodbye to adjunct status of the Government and many restrictions on the financing process. Their sources of funds have been broadened from a single financial allocation of government to multiple channels financing. Prisons can address the funding gap through the multi-channel financing when they develop the capital markets and expand the proportion of corporate finance. The specific methods include:allow the companies, which comply with related laws and regulations, to issue shares and trade on the market, allow prison enterprises to issue a certain number and species of bonds, it improves stall motivation that allowing prison-house employees to hold stocks, allow prison enterprises to try to finance leases and other financing forms to get diversification of investment, allow prison enterprises to accept the investment of social and economic organization, etc. Meet the needs of enterprise funds, improve the capital structure and reduce business risk through multi-channel financing.The sixth part sums all the conclusions, contributions and shortcomings of the paper.