New Perspective On The Relationship Between Government And Business:a Comparative Study Of State-Owned Enterprises And Private Enterprises

Market, enterprise, government are three basic elements of economic operation, commodity is produced by the enterprise, and allocated, exchanged, consumed through the market.The government constrain the behavior of enterprises by macro control and micro regulation, and to distinguish the type of market positioning. Therefore, market, enterprise and government are three actors that inseparable and interdependent. Economic development, especially the socialist market economic growth and progress, need to find out how resources allocated and to clarify specific responsibilities of relevant institutions. When one economic behavior needs the administrative intervention, the government should fulfill its responsibility. What should be handed over by the free market, the market and enterprise should be surely given sufficient space to play freely. Only when the "visible hand" is well controlled, and the "invisible hand" is well used, can resources be allocated according to the best way, and the maximum gain fulfilled.Private enterprise is the most active economic agent in the socialist market economy with Chinese characteristics, which gradually take responsibility to promote the economic growth, social employment, and to enhance people’s quality of life. The construct and maintain on relationship between private enterprise and government is the key factor on the private enterprises successful development. This relationship has not only an effect on the private enterprises’ social status, but also on the transformation of our economic structure. At this stage, we should research how to establish an equal, independent, stable, and sustainable relationship between government and private enterprises, especially to get rid of the traditional narrow governance ideas. We should strive to protect the rights and interest of private enterprises through the overall strength, the law regulation, and the broken of the entry restrictions etc. According to the "law of no-prohibited to the guiding ideology, without authorization not to", we need to construct the service-oriented government, the independent enterprise, and the competitive market. Let market play the leading role in the allocation of resources, and to inject more vitality into the development of private enterprises.State-owned enterprises are the lifeblood of the national economy, are the core pillar of the national financial revenue and expenditure. State-owned enterprises take great responsibility to safeguard national economic security and to protect the benefit of people’s livelihood. The Third Plenary Session of the eighteen proposed to deepen the reform of state-owned enterprises, this is a breakthrough for the past decades of SOE reform, the intensity and depth on reform of this time will be unprecedented increase, and the impact will be more far-reaching as well. At "The12th Five Year Plan" period, the reform of state-owned enterprises should break the administrative intervention and the administrative monopoly, state-owned enterprises which lack of competitive advantage should give way to the non-public sector of the economy. Introducing competitive factors and implementing the mixed ownership in the state-owned enterprises. To get rid of the administrative appointment from enterprise management, the state-owned enterprises should reform on the distribution of equity. Additionally, strengthen the construction of the modern enterprise system and the importance of the board. Pay much attention to the state owned capital management and investment, so that the separation between government and enterprises, and the separation between government and capital can be realized soon.The transformation of economic structure, together with the reconstruction on relationship between government and enterprises will inevitably face the fetters, which will lead to a redistribution on interest and eliminate outdated industry upgrade. But from a long-term perspective, deepen the reform will improve China’s socialist market economic system, improve China’s comprehensive national strength and international status, and realize the goal that people live and work in peace and contentment. Therefore, we should strengthen the courage and confidence of reform, and set all our efforts to make it come true.Firstly, preface. In this part, we mainly talk about the background and significance of this topic, the main research content and possible innovation and deficiency of the paper. Secondly, review of the literature. We give a summary on the government intervention theory, modern property right theory, and the game theory in this chapter. In the following part, we analyses the unique political business relationship in China, and the existing differences between private enterprises and state-owned enterprises. Thirdly, Pros and cons of government-business relations Review. This chapter for private enterprises and state-owned enterprises to expand reviewed the pros and cons, analysis and deficiencies at the inevitability of their existence. Fourthly, in this chapter, we have talked about the relationship between government and enterprises from perspective of incomplete information dynamic game, the results showed that they were at the state of non-cooperative game. Additionally, according to our new model, we though new type of relationship between government and enterprises built on the Stag Hunt Model could meet needs of Pareto Optimality. Fifthly, the development of the market economy determines the new paths’choices between politics and business. NO1.The new government-business relations of private enterprises:rules of game and links of game. Based on the foregoing defects, this chapter gives an analysis on the system rules forming, cooperation and win-win, to establish the relationship between private enterprises and government according to the two perspectives. Take Wanda Group for example, their strong points on "close to government, stay away from politics" are worth learning. NO2.The new government-business relations of state-owned enterprises:get rid of political fetters, and introduce elements of competition. In reality, the process of marketing are forcing the state-owned enterprise to reform, this part selects the socialization of property rights, enterprise system construction, improve the principal-agent relationship and the optimization of state-owned capital management four aspects as the way to realize the separation between government and enterprises, and the separation between politics and capital. At the same time, we take the state-owned enterprise in Singapore which named Temasek Ltd for example, to provide reference for reducing administrative intervention and "manage capital". Sixthly, sum-up.