whichtheoryisdirectingchinasreformofstate-owned.docVIP

Which Theory Is Directing China’s Reform of State-Owned Enterprises: From 1978 to 2008 and Onward? Zheng Li, Shuanping Dai, Ping Zheng Abstract: China’s reform of state-owned enterprises has achieved notably through 30 years of reforms while the performance of state-owned enterprises is still low. Basing on a summing-up of reforms of state-owned enterprises the paper gives an evaluation of economic theories affecting China’s reform of state-owned enterprises. Focuses in different periods of the reform are varied, as are the theories guiding decision-making. This paper, taking the three representative arguments of Wu Jinglian vs. Li Yining, Justin, Yifu, Lin vs. Zhang Weiying, and Lang Xianping vs. Gu Chujun within the 30 years as a clue, has put in a model theories that affect China’s reform of state-owned enterprises like market economy theory, modern property right theory, modern firm theory, and management of state assets. The paper holds that economic theories that are able to guide China’s reforms of state-owned enterprises should possess at least the two theoretical characteristics: They can build state-owned enterprises into subjects of socialist market competition macro-economically and they can explain and solve the multi-level principal-agent relations of state-owned enterprises micro-economically. I. Introduction China’s traditional state-owned enterprise system is connected with the highly concentrated planned economy system. Under this kind of system, the enterprise is just a workshop in the national economy managed as a large factory under the regulation of state instruction plan. The enterprise is essentially a subsidiary of the administration authorities, but not an independent commodity producer. The enterprise system, which distinguishes from the state administrative authority system and is economically independent, in fact does not exist. Nor does the independent enterprise property right which relates with market transactions. As a result of the