Constraints And Solutions Of Central State-Owned Enterprises In The Reorganization And Consolidation

Central SOEs have a vital bearing on the lifeline of national economy and State security. As they have both economic attributes and social attributes, it’s impossible for them to concentrate on merely making money. They take great responsibility in the recovery of Chinese economy and the maintenance of social stability during the economy recession.The reform of central SOEs began in2003, when State-owned Assets Supervision and Administration Commission of the State Council (SASAC) was established to push forward the strategic adjustment to the layout and structure of the State economy, and to realize the preservation and increase in the value of State-owned assets. Since then more and more policies have been launched to help forward the renewal of central SOEs. In the Eleventh Five-Year(2006-2010) period, Central SOEs have made great development,38of them rank in the list of The Fortune500. The scale of them grows with an amazing speed, while few are global leaders in their industry. Because of their background, it’s hard for non-public enterprises to compete with public ones fairly. This harms the long-term development of China and social harmony. Performance evaluation system of managers in charge of central SOEs affects their decision making, especially in merger and acquisition affairs. High taxation in the divestiture and transfer of corporate constrains their further development. There are other factors hinder the consolidation and reorganization of central SOEs, like the enormous liability burden of past, employees’idea of taking working in SOEs as a lifelong secure job, and the government’s intervention. As the development of central SOEs is concerned by the whole society, this thesis tries to offer some suggestions.In this paper, comparative analysis, normative analysis are introduced to show constraints and expected solutions. This thesis can be divided into five sections:Chapter1introduces the topics of the background, purpose, significance of the study; Chapter2is an overview of concepts of corporate consolidation and reorganization, definition of central SOEs and the brief history of their reform, and the necessity of further reorganization and consolidation; Chapter3is the analysis of several cases and point out the problems of central SOEs’reorganization and consolidation;Chapter4makes comparison with world-class companies like P&G to find our shortcomings, also shows several positive cases of our own, on this basis, suggestions and policy recommendations like fine management should be introduced to the performance evaluation are proposed; Chapter5is the future development prospects of central SOEs. The innovation of this paper is commenting central SOEs objectively, and proposing practicable suggestions, while most of former ones are too radical. Because of lack of working experiences, some suggestions maybe too theoretical, further study is needed through working experiences.