Research On The Performance Of Corporate Governance With Mixed-Ownership Reform

Since the proposal of “actively developing a mixed ownership economy” was put forth at the Third Plenary Session of the 18 th Chinese Communist Party Central Committee,the reform of introducing mixed ownerships to Chinese state-owned enterprises(SOEs)has made great progress.Despite the achievements that have been made in the reform,many problems in the SEOs' governance structure have not been resolved.For example,most SEOs still keep “the dominant state shareholder” and the corporate governance structure remains inadequate.These issues have restricted the development of SOEs especially in their marketization.Therefore,balancing the contribution of capital between state and non-state stakeholders is at the core of the mixed ownership reform.Furthermore,whether such approach can improve the corporate governance and the SOEs' efficiency need to be answered with empirical evidence.In literature,corporate governance reform has attracted much attention in recent years.Understanding SEOs' corporate governance mechanism particularly on the distribution of ownership has become a popular topic among scholarship.However,little attention has been paid to the exact composition of capital and its contribution to the mixed ownership reform.The current research aims at filling in this gap with the case study of Yunnan Baiyao.Yunnan Baiyao,a major pilot enterprise for the SOE mixed ownership reform in Yunnan Province,invented a model of “balanced shareholding” which strikes a balance between the state-owned and non-state-owned capitals.In details,the reform has been carried out in two phases following a top-down approach.The paper first introduces the background and history of the company's mixed ownership reform.Then,based on the analysis of post-reform changes in the company's governance,the author provides an evaluation on whether the company has achieved its expected outcomes under the “balanced shareholding” model.The paper concludes that the reform featuring “balanced shareholding” has a positive effect on the company's governance,and will foster long-term and sustainable development for the SOE.The “balanced shareholding” model is a major innovation in the reform of Yunnan Baiyao.It addresses the issue of “state-owned share holds dominance”.By introducing non-state capital,changes on corporate governance were accordingly made.Findings from this paper provides a policy reference for the mixed ownership reform in SOEs.As the second phase of the reform is still ongoing in Yunnan Baiyao,the researcher has collected currently available data for the analysis which subjects to change in the future.