The Study On China’s State-owned Capital Gains Confiscated System

As social animals, human’s survival and development will inevitably require demands for nature and society. Since the Industrial Revolution and the Enlightenment, society has refocused the study on the diverse needs of men in the community. Of public goods itself, it is clearly different from the individual items in nature. The value of the individual items is subject to market supply and demand, and closely linked to the scarcity of resources, therefore, it is characterized with competition and exclusivity. However, failure in the market side does not mean that members of the community can reduce or even give up public demand, the "visible hand " regulation should replace the "invisible hand" in this area. So,, as a social welfare legal bearers, government must ensure public goods provision. To some extent, the legitimacy of a government depends on protecting supply of public goods. Financial functions of government are not naturally occurring. In fact, the national government is not only a supporter, but also an executive. The government is there to fulfill the functions of an organization, ensuring welfare and security of citizens and gather communities through social contract. Thus, on behalf of citizens, government is responsible for the production and supply of public goods, which should maximize the public interests of the society with the improvement of level of supply. Through social contract, people establish a state by delegating rights and a part of resources, which, unequivocally, means that state claims ownership of state-owned capital.As investor of enterprises, the state claims the ownership of gains out of state-owned capital. The investor is entitled to participate in national and state capital share investment income generated. This gain rights vested under the conditions of market economy are conducted on an equitable basis of a contractual relationship between the state and business, instead of a compulsory act of the State. As a representative of the state, government also enjoys political power and property management powers. Supervision and management of state capital by the same agency will twist into "executor is its own supervisor", which will increase the state-owned capital operation of moral hazard. Since reform and opening up, the government has been focused on running top management of state-owned capital. In terms of policies and legal measures, SASAC was established to run asset management of state-owned enterprises and, and the " State-owned Assets Law" was carried out, which initially built a state-owned asset management system.Overall, China’s state-owned capital gains management system is still in confusion, that is, the owner of the state capital, the occupants (operator), and the distributor of income are not clearly defined, and their interrelationship is also vague. First, the way of state-owned gains management is not clear; Second, responsibilities of authorities are not clearly distributed. The past decade has witnessed how the budget system, one of the basic systems, has developed from scratches. Sound budget system of state-owned capital gains is of vital importance to its transparency and efficiency. But the current budget system also bears its own outstanding problems. One is the dislocation the state capital budget targets; second is the state capital budget connotation is too narrow. Sound supervision system must contain a full range of information disclosure system, reasonable performance evaluation system, scientific audit system and strict accountability system, and must be organic complexes between various systems in order to ensure the smooth implementation of the state-owned Assets Supervision and rights. Inadequate system of state-owned capital gains mainly three points:First, the information disclosure system is not sufficient; Second, performance monitor is unreasonable; Third, audit and supervision is not well-designed.In summary, the right of state-owned capital gains can progress from these legal system aspects. One is to strengthen the dominant position of state-owned assets management organization, management functions must explicitly defined, also, clear distinction of the relationship between the vertical and horizontal coordinators among the various state agencies should be made. The second is to enhance the state-owned assets confiscated budget system. It is necessary to reconstruct the target value of state-owned assets of the budget system, but also to extend the adjustment range of state-owned capital budget legal system. The third is to strengthen the supervision of state-owned capital gains confiscated improve the information disclosure system, performance evaluation system and audit oversight.