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Reforming the Chinese state-owned enterprise a law and economics perspective Wang, Feihong
Abstract
China stands in contrast to the transitional countries of the former Soviet-bloc in its economic reform path that can be characterised as incrementalism instead of 'big bang," and marketisation instead of corporatisation. Despite the extensive reforms in all segments of society, the ownership of state-owned enterprises has been maintained largely under the control of the Chinese authorities as the 'brown jewel" of the socialist regime. Yet such a reform path has led China to phenomenal and sustained economic growth far from the dim picture initially envisaged by some commentators. This has given rise to intense disputes concerning a host of questions with profound theoretical and practical implications. Following the line of theories of the firm in law and economics, this study attempts to analyse the state-owned enterprise reform from two aspects. On the one hand, it examines the Chinese economic reform as institutional changes on the basis of the transaction cost economics and property rights theory. Having established that China's reform is of unambiguous property rights implications, this study continues to demonstrate that enormous transaction costs still exist in the current mixed economy. As the fundamental source of such costs is the incompatibility of state ownership and free market economy, the further reform featured with a privatisation of state-owned enterprises is thus called for. On the other hand, seeing that the agency problem singles out as the most crucial transaction cost, this study further focuses on the issue of ownership and control in the Chinese state-owned enterprises. Mainly based on the contractual theory of firm, it analyses two major initiatives of the enterprise reform - the CMRS, and the corporatisation and securitisation of state-owned enterprises. While the former is dismissed as a transitional solution, the latter is deemed to point a right direction for the privatisation of state enterprise and an optimal relationship between state and enterprises. Nevertheless, the share and corporate governance structure provided in the current Chinese corporate laws must undergo immense changes. This study is at best a preliminary analysis of limited issues. Far more efforts are needed to gauge such a broad and complex topic.
Item Metadata
Title |
Reforming the Chinese state-owned enterprise a law and economics perspective
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Creator | |
Publisher |
University of British Columbia
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Date Issued |
1996
|
Description |
China stands in contrast to the transitional countries of the former Soviet-bloc in
its economic reform path that can be characterised as incrementalism instead of 'big
bang," and marketisation instead of corporatisation. Despite the extensive reforms in
all segments of society, the ownership of state-owned enterprises has been maintained
largely under the control of the Chinese authorities as the 'brown jewel" of the
socialist regime. Yet such a reform path has led China to phenomenal and sustained
economic growth far from the dim picture initially envisaged by some commentators.
This has given rise to intense disputes concerning a host of questions with profound
theoretical and practical implications.
Following the line of theories of the firm in law and economics, this study
attempts to analyse the state-owned enterprise reform from two aspects. On the one
hand, it examines the Chinese economic reform as institutional changes on the basis of
the transaction cost economics and property rights theory. Having established that
China's reform is of unambiguous property rights implications, this study continues to
demonstrate that enormous transaction costs still exist in the current mixed economy.
As the fundamental source of such costs is the incompatibility of state ownership and
free market economy, the further reform featured with a privatisation of state-owned
enterprises is thus called for.
On the other hand, seeing that the agency problem singles out as the most
crucial transaction cost, this study further focuses on the issue of ownership and
control in the Chinese state-owned enterprises. Mainly based on the contractual theory of firm, it analyses two major initiatives of the enterprise reform - the CMRS,
and the corporatisation and securitisation of state-owned enterprises. While the
former is dismissed as a transitional solution, the latter is deemed to point a right
direction for the privatisation of state enterprise and an optimal relationship between
state and enterprises. Nevertheless, the share and corporate governance structure
provided in the current Chinese corporate laws must undergo immense changes.
This study is at best a preliminary analysis of limited issues. Far more efforts are
needed to gauge such a broad and complex topic.
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Extent |
9864604 bytes
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Genre | |
Type | |
File Format |
application/pdf
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Language |
eng
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Date Available |
2009-03-16
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Provider |
Vancouver : University of British Columbia Library
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Rights |
For non-commercial purposes only, such as research, private study and education. Additional conditions apply, see Terms of Use https://open.library.ubc.ca/terms_of_use.
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DOI |
10.14288/1.0087826
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URI | |
Degree | |
Program | |
Affiliation | |
Degree Grantor |
University of British Columbia
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Graduation Date |
1996-11
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Campus | |
Scholarly Level |
Graduate
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Aggregated Source Repository |
DSpace
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Item Media
Item Citations and Data
Rights
For non-commercial purposes only, such as research, private study and education. Additional conditions apply, see Terms of Use https://open.library.ubc.ca/terms_of_use.