State-Owned Enterprise's Ownership Reform

2 Theoretical Basis of SOE Mixed-Ownership Reform

DOI: 10.4324/9781003361404-3

The confusion faced by the practice of SOE mixed-ownership reform and the debate on the guiding theories indicate that the theoretical and practical circles need to find a new theoretical basis for the new round of SOE mixed-ownership reform. In short, SOE reform faces two major problems. One is the problem of excessive supervision under the dominance of a single shareholder. The other is that the designers of the incentive mechanism for managers lack long-term incentives due to the absence of the owner. To use a popular expression, the dilemma faced by SOEs is “absent for what should be managed and intervening in what should not be managed”. Therefore, the new ...