Research On Profit Distribution System Of China’s State-owned Monopoly Industry

The reform of China’s State-owned Enterprises(SOEs) has been the focus of academic discussion and research. In the past10years, China’s SOEs reform has achieved some results, but there are still many problems to be solved, especially in the trend of the income gap is widening between China’s State-owned monopoly industries and other industries, this income gap is generally be attributed to the high profits of monopoly SOEs in State-owned monopoly industries. Compared with the high profits of monopoly SOEs, however, their profits distribution is more concern, the profits distribution reform of monopoly SOEs has become a hot issue and difficult problems for China’s SOEs reform.Since "The Administration Ordinance for Charging State-owned Capital Gains of SOEs" promulgated in2007, most of academic discussions focus on the reasonable proportion of profits State-owned monopoly industries turn over to the government for their profits distribution issue. However, different scholars have not reached the same views and conclusions based on different perspectives. With the government gradually accelerating to establish the State-owned capital management and budget institution and continuing to standardize the profits distribution relationship between the government and SOEs, it’s particularly important to determine the reasonable proportion of profits State-owned monopoly industries turn over to the government scientifically.This paper selects China’s State-owned monopoly power industry as the study object, and tries to calculate a reasonable proportion of profits turned over to the government with reasonable theoretical assumptions and scientific model-building. In addition, this paper also compares China’s power industry with Sweden’s and India’s State-owned monopoly power industries, analysis and learns from their mode of profits distribution. Through these studies, this paper will provide scientific theoretical foundation for government to regulate SOEs’profits distribution behavior, establish scientific and reasonable profits distribution institution and profits distribution mechanism.Through the research above, this paper believes that the proportion of profits which China’s State-owned monopoly power industry should turn over to the government is too low and should be increased. Considering the interests of State-owned shareholders and the sustainable development of SOEs, the most reasonable proportion of profits turned over to the government is40%-60%. In addition, this paper suggests that in order to regulate the profits distribution behavior of monopoly SOEs better, the government and SOEs should be in a reasonable position and clarify the relationship of profits distribution between them. At the same time, the government should formulate scientific and reasonable policy of State-owned monopoly industries’ profits distribution, establish and improve the institution and operation mechanism of charging for the State-owned capital gains, strengthen the supervision and management of profits distribution behavior of State-owned monopoly industries, broaden the way to use and guide the direction of use of the profits turned over to the government, so that which is beneficial to the commonwealth.