Government Subsidies And Rent-seeking By The Enterprises Under The Soft Budget Constraints

China is still in the transition process of planned economic system to the market economy at present, the Government has played a very important role in the market economy.As an effective means of government intervention in the market, the effect of Government subsidies is obvious and significant. Our government providing subsidies for listed companies has become a common phenomenon in China’s A-share market in recent years, Among the ten rankings of government subsidies,State-owned enterprises, especially the central enterprises, account for the majority. Because of the central government and business enterprises combine natural attributes, to a certain extent, the central enterprises tend to promote the listing SBC with its own advantages, even to bear the burden of national policy necessarily as an excuse to use the surplus to manage access to government subsidies. The government subsidies deemed to make up for their poor management of shortcuts, breed rent-seeking impulses. Therefore, under the background of numerous government subsidies, to explore how to regulate the market conduct of listed central enterprises become our urgent problems.We take the China National Petroleum Corporation as an example in this paper, and under the background of government subsidies to the central rate, expounded China’s current economic market, due to the presence of central enterprises listed on the SBC to bring rent-seeking space. Meanwhile, the vulnerability of the market economy system is related to the behavior of the central rate of alienation provides institutional convenience, not a sound legal system and regulatory system also contributed to the central enterprises to get listed on one of the major reasons for government subsidies are not standardized. The reason Finally, the issues raised and the formation of the problem, trying to how to properly locate the role of central enterprises in the market, deepening the central enterprises reform and improve government subsidies related systems, sound legal and regulatory system and standardize government behavior and put forward a number of recommendations for improvement.This Paper is divided into five chapters; the first chapter is introduction, which introduces the background, purpose and significance of this research, and the whole idea of specific papers and research methods employed.The second chapter is Literature review, the review focuses on the theory of soft budget constraints and government subsidies, and SBC causes at home and abroad, and government subsidies motivation, role and other related documents.The third chapter Mainly concentrates on institutional background analysis,which describes the environment and the status quo of China’s special economic produced under the system of government subsidies.The fourth chapter is Case introductory section, firstly statistical results of operations in the oil over the years and received government subsidies outlined, followed by the means described in detail the use of earnings management in the oil refining losses and thus exacerbate apply for government subsidies.The fifth chapter focus on the analysis, in-depth analysis of the reasons for the oil to get government subsidies and the negative impact this event brings.The last chapter is Inspiration form the case and the proposal about the Central enterprises reform. after a comprehensive analysis of the oil causes and effects of government subsidies.In order to fasten deepen reform of the central enterprisesand accelerate the restructuring of the financial under the background of tax system, I try to provide specific policy recommendations for the issues involved in this case.The main contribution of this paper can be reflected by reference value of Chinese state-owned enterprises in obtaining government subsidies policy reform to a certain degree.Through the case studies of government subsidies in the oil, we find that the way of CNPC to obtain government subsidies, the use of earnings management means the transfer of profits of listed companies to improve our code of conduct and stretgthen supervision and management of the SASAC provide policy recommendations. The inadequacies of the paper is as follows:First, given the limited knowledge I have learned and writing time, government subsidies for the oil stays in the case of the annual report analyzing more data analysis, combined with the depth of the case is not related to macroeconomic policies and specific oil Issues Industry refined oil pricing mechanism such as a comprehensive discussion. Secondly, as an object of study in the oil body has its own micro-uniqueness of such a monopoly, the central enterprises, huge profits, etc., so the case has certain limitations in this article and couldn’t reflect the whole issue of government subsidies.