Study On Central-Local Cooperational Model And Rapid Expansion Of National Central Enterprises:Risks And Countermeasures

As an important driving force for the process of economic development, national central enterprises play an important role in process of the national economic recovery and development. But this development model rely on government resources as well as long-term problems caused by the monopoly has been controversial too. In2003, the SASAC(State-owned Assets Supervision and Administration Commission of The State Council) was established, the national central enterprises began to implement "the bigger, stronger " expansion path through "restructuring"、"reorganization" and so on, which’s role to be aggravated again, especially after the financial crisis in2008, the state launched four trillion investment, the central enterprises were given high hopes and responsibility for maintaining the growth rate of eight percent. Meanwhile the central enterprises began to carry out the trend of expansion, but the negative effects of investment plan were also controversial too. which is not the end, the local version of the "four trillion investment plan" were quietly spring up. the cooperational model between central enterprises and local governments is an emerging investment phenomenon in recent years. In face of the weak momentum of economy growth caused by the financial crisis, local governments successively launch cooperative projects with national central enterprises through a series of preferential policies to boost GDP level by attracting more investment and projects. Meanwhile, national central enterprises undergo rapid expansion during the stage of economic downturn. However, the great leap forward of central enterprises investment driven by the central-local cooperation deviates from the policy orientation of adjusting economic structures and changing growth modes. Furthermore, the negative effects will worsen the overcapacity of China’s economy, resulting in the advances of state owned enterprises and the retreats of private sector, the inefficiency of national central enterprises and the risks of investments,At the same time, it has been a potential risk for China’s economic performance while the anti-market central-local cooperation model damages market order. Therefore, policy makers should pay high attention to the problems, take appropriate measures in promoting governmental innovation and market construction, and effectively changing the economic development modes, eliminating the negative effects brought by the nonmarket cooperation model between national central enterprises and local governments and reducing the economic risks of rapid expansion of national central enterprises to put economy back on the track of sustainable development.Based on this, firstly, the paper focus on the current situation of the central-local cooperation model, and then analyzes the central-local cooperation model and the problems of reckless expansion of cen- tral enterprises on the scale, the region and the field of investment. After that, the paper indicate the formation mechanism of this model from two aspects of the government and the central enterprises,and summary the actual problems of the model of cooperation resulting from excess capacity,"the advances of state owned enterprises an d the retreats of private sector" and the risks of the high speed of ra-pid expansion of central enterprises.Finally, the paper gives some feasibl e countermeasures and suggestions from the central enterprises level an d the government level to solve practical problems.