Allocation Of Chinese State-owned Enterprises

The operation of state-owned enterprises (SOE) is important to China’s economy and people’s livelihood no matter in the past or in the future. The16th National Congress of the Communist Party of China (CPC) has proposed the establishment of State-owned Assets Supervision and Administration Commission (SASAC) to perform the duties of state-owned capital investor, stressed on the separation fo the functions of the ownership and management of the SOE. Under this background, income sharing and management of state-owned enterprises have a clear program and principles. The subject of the SOE income sharing generally includes the investors, the managers, the employees and the creditors. Hence, the income sharing between these subjects related to the SOE operating performance, income management, the incentive remuneration system and the salary system.This paper begin with the SOE income sharing system between the country (government) investors, managers and workers, and the reality situation of it. Mainly focus on the empirical test and research on three aspects of income sharing:the profit distribution, the salary system and the incentive mechanism. First, researched SOE profit distribution from the angle of the comparison between State-owned Key Enterprises (SKE), State-owned Key Enterprises equity holdings and listing Corporation, then the comparison of the local governed state-owned enterprises and the State-owned Key Enterprises. Then, focused on the marketization of the salary system of the SOE employees and the influence degree of profitability and the monopoly on the SOE workers wages. Last, went through with the economics theory on the SOE managers’rights on the sharing of SOEs’residual income. Then discussed SOEs’characteristic and its particular Principal-agent problem. Combined with the macro analysis on the current situation of the SOEs, this paper concludes that, government should clarify and standardize the economic power of state-owned enterprises, increase the level of competition of the SOEs’internal and external environment, reduce administrative intervention, maintain the order of capital market, manager market and labor market. These are the present requirements of improving the performance of SOEs and the realization of profit allocation efficiency. At the same time it is the premise of the further mutual development and compatible between SOEs and other enterprises under the market economy condition.