Yanxia Tang

Chinese government declared that the target of state-owned enterprise reform, which is one of the three major reforms, was almost attained at the end of 2000. However, state-owned enterprise remains as a big issue. The purpose of this study is to examine the stock system reform of large-sized state-owned enterprise. The hearing investigation took place in Jiangsu-province in China in March and September 2001. The eight incorporated companies investigated in the area will three corporate governance models; an authorization management model, the party committee initiative type model, and a stock diversification model. An authorization model is promoted by the separation of the government. By shifting from the national property management company-it is preserved by the conventional government function-to the parent company, the interference of governmental corporate management will be neutralized. To some extent, the separation of the government and companies would be carried out. On the other hand, the issue of a parent companies increasing power of maximum stockholder will be a concern. In comparing with the clarification of property rights, the responsibility and rights, the separation of the government, and the science-inaction of management, a stock diversification would be the most ideal model. As a result, the stock system reform will gradually change from the authorization management model to the stock diversification model. However, we must not ignore the rule of a party and the stock diversification model because a state-owned enterprise organization is closely connected to the socialist system and because the party will continue to associate with the internal structure of corporate governance in a certain way.