On The Legal Realization Mechanism Of Capital Proliferation Of State-owned Holding Companies

With the development of socialist market economy, China's economic reform is faced with great pressure nowadays, of which, the system transformation of state-owned enterprises is the most obvious one. However, the present legislative mode still sticks to the old mode, where state-controlled companies are misunderstood as enterprises of “public corporation”, “quasi-politician”, and “being fostered by the state”, and the connotation of freedom and competition under market economy has never been comprehensively understood, so that the socialist market economy with Chinese characteristics is impeded from further development. By precisely defining the nature and characteristics of state-controlled companies and conceiving corresponding legal mechanism, the author expects to resolve the questions of existing system in state-controlled companies, so as to accelerate the capital increment thereof.There are three parts in this thesis. In the first part, the author clearly describes state-controlled companies' status as an independent and special commercial subject under the Company Law of the PRC. On the one hand, state-controlled companies are provided with business subject's double characteristics, which are profitable and organizational, but different from common companies due to the integration of social public purpose, therefore state-controlled companies are special business subject. On the other hand, state-controlled companies' position as business subject and their business scope in competitive fields result in the application of the Company Law of the PRC thereto, and the particularity of state-controlled companies provides the possibility of being independently regulated by the Company Law of the PRC. Finally, on the basis of state-controlled companies' features in insufficiently competitive fields, the author analyzes the necessity and legitimacy of state-controlled companies' entering into the market for value increment, which reveals the necessity of doing so in sufficiently competitive fields.In the second part, the author argues the reform of existing supervision system of the state-controlled companies. Profitability of the company is proofed by analyzing its nature in the first part, then in the second part, proposals of restraining inefficient governmental intervention and maximizing the profitability of companies and shareholders are conceived. In this part, the author points out the defect of State-owned Assets Supervision and Administration Commission possessing oversized power, who acts as the referee and the athlete at the same time. Then, an advice of dividing State-owned Assets Supervision and Administration Commission's power into two portions is proposed, where its power of investment is possessed by state-owned assets investment companies, while the Commission retains the power of supervision. Finally, in order to further restrain state-owned assets investment companies from intervening corporations and market, it is necessary to introduce the “board centralism” and define the “final control” of state-owned assets investment companies, to lower administrative intervention.The third part is divided into two small parts. one is The marketization of state-controlled companies. The existing system has defects such as inferior profitability and being controlled by insiders, which can only be solved by the marketization of operator. Opinions in this part are developed through the definition of operator, the nature and quality of market operator, approaches of marketization and incentive mechanism. The other is essential to this thesis, in which the dividend is argued by pointing out drawbacks of present dividend system and expressing the author's opinion.