| The diversity of the railway business has started since 1980s. Railway enterprises began to perform a kind of transverse economic corporation which leads to the embryo of enterprise groups with the intervention and guidance of the Government. Since the Certain Provisions on Accelerating the Diversified Railway Business was issued by Ministry of Railways in 1992, the diversified railway group has experienced gradual development and growth as well as 20 years'arduous exploration. Now it has become a large-scale group with large but scattered capital investment and many industries involved. Moreover, the business needs expansion and the market liquidity is gradually tightened in the expectation of inflation. Therefore, issues like how to function the Group's funds effectively in order to meet its demand of development has drawn much of the management's attention.The centralized management of enterprise group's funds is a widely accepted funds management mode by those large-scale enterprise groups. The management concentrate, deploy and apply all the funds of the group by properly handling the relationship between centralization and decentralization in order to achieve the integration and macro-allocation of financial resources within the whole group as well as improve the efficiency of funds and reduce the financial risks. In 1994, the Ministry of Railways established the Railway Settlement Center, which has played the role of internal bank. The diversified group has been attached to the Railway Settlement Center for centralized management of the group's funds. However, the group's market economy system differs sharply from the planned economy system of the Railway Bureau in the use of funds. Thus the traditional settlement center cannot meet the needs of centralized management of group funds any more. The deficiencies lie prominently in the following issues:decentralization of funds, excessive administrative intervention, the lack of financial function, imperfect budget system, etc. These have seriously hampered the competitiveness of the group, and it has become inevitable to optimize the management of the existing resources.In this paper, based on the conditions of the diversified railway group which the author works for, the centralized management of funds were discussed and analyzed from various perspectives. In addition, the author analyzes the existing problems within the centralized management mode of funds and provide solutions as well as optimizations by comparing three common ways of fund management for the enterprise group.The main contribution of this paper is to propose the parallel mode between the Railway Settlement Center and the Group Finance Company, which combines their advantages efficiently and flexibly to produce greater benefit. Research on this issue has made great theoretical and practical value. |
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