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Economist on SOEs Share System
Professor Wu Jinglian, a famous Chinese economist, said two major problems -- "one-share monopolization" and "one-share domination" have to be tackled in the reform of state-owned economy.
He noted that many large and medium-sized state-owned enterprises (SOEs) have various reforms carried out and a varied share system should be introduced. Omnipresent "one-share monopolization" by the state must be done away with. In the past, 79 out of the 100 enterprises experimenting on reform were 100 percent owned by the state. It is hard to run a company or a SOE well under singular state control. Multi-holders should be developed except a few subject to state control.
Another problem is "one-share domination", namely, the state holds 80-90 percent of shares in control of an enterprise. In this case, operational modern enterprise management will be ruled out. A decrease and transfer of state shares by enterprises in the form of social security funds instead of selling them in stock markets will be key to finding a solution to the problem.
By PD Online Staff Deng Gang
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