TOWARD THE MODERN CORPORATION - RECENT DEVELOPMENTS IN THE INSTITUTIONAL REFORM OF STATE-OWNED ENTERPRISES IN MAINLAND CHINA

At the Chinese Communist Party's (CCP's) Fifteenth Congress, held in S eptember 1997, the Central Committee endorsed both the corporatization of large state-owned enterprises (SOEs) and the restructuring of smal l SOEs and decided to step up the speed of reforms. The central compon ent of the government's reform program is ''zhuada, fangxiao'' (''gras ping the big, enlivening the small''). First, the government is creati ng a number of large enterprises and enterprise groups through encoura ging mergers in strategic sectors. Second, it is encouraging small and medium-sized SOEs to experiment with ownership reform. The aim of thi s paper is to review these recent initiatives and evaluate the problem s still confronting state-sector reform. Within this general framework , a specific objective of the paper is to provide information on recen t developments in areas (such as bankruptcies, mergers, and shareholdi ng reform) where the government is experimenting with new institutiona l forms.