Study On The Effectiveness Of ZTE Commercial Mixed Ownership Reform

Since the concept of mixed ownership was first put forward at the Third Plenary Session of the 14 th CPC Central Committee,the reform of mixed ownership in state-owned enterprises has been an important element of the transformation of the economic system,and it plays an important role in the economic and social development of China.In 2015,the State Council issued the Opinions on Developing Mixed Ownership Economy in State-owned Enterprises,pointing out that by deepening the reform of mixed ownership in state-owned enterprises,it will improve the general requirements of allocating and operating efficiency of state-owned capital and promoting the conversion of operating mechanisms of state-owned enterprises.The focus of the mixed ownership reform of SOEs is not only on the change of the shareholding structure,but also on the continuous improvement of the governance mechanism of the company by reaching out to all levels within the company.Therefore,it is necessary to study in depth the effect of mixed ownership reform of state-owned enterprises.Zhongxing Commercial is the first commercial enterprise group in Shenyang,which underwent a mixed ownership reform in 2019.This paper uses the mixed ownership reform of Zhongxing Commercial as a case study to explore what changes in corporate governance have been produced after its mixed reform,how these changes have affected the performance of the enterprise,and what the actual effects of its mixed reform have been.This paper firstly compares the literature on mixed ownership reform of state-owned enterprises;secondly,it analyses the basic situation of the mixed ownership reform of ZTE Commercial in terms of the participants,background,process and motivation of the mixed reform;then it examines the changes in the four aspects of equity structure,governance structure,incentive approach and business model after the mixed reform of ZTE Commercial,and how such changes contributed to the improvement of ZTE Commercial’s performance;Finally,the effects of the mixed ownership reform of ZTE Commercial are analysed in terms of market response,non-financial performance and financial performance.The study find that the short-term market response to the mixed ownership reform of ZTE Commercial was positive;in terms of non-financial performance,the introduction of Liaoning Fangda optimised the governance mechanism of ZTE Commercial,transformed its business model and improved its management efficiency;and financial performance was improved overall after the mixed ownership reform.Overall,the hybrid reform of ZTE Commercial has improved the governance mechanism and enhanced corporate performance,achieving the goal of bringing into play the positive corporate governance effect through the hybrid reform.This paper makes some suggestions in the light of this case: firstly,to select a suitable hybrid reform model "according to the needs of the enterprise";secondly,to find a strategic investor that matches the enterprise and optimise the governance mechanism of the company;thirdly,to make full use of the advantages of resources and promote the integration after the hybrid reform,with a view to providing a reference for commercial state-owned enterprises to carry out hybrid reform.Thirdly,it aims to make full use of the advantages of resources and promote post-hybrid integration,with a view to providing reference for commercial state-owned enterprises to carry out mixed ownership reform.