Research On The Motivation And Effect Of Introducing State-Owned Capital To Jiangsu Zhongsheng Gaoke Environmental Co.Ltd.

Since the reform and opening up,private enterprises have been an important force in China’s economy,playing a key role in both paying taxes,promoting employment and driving economic development.However,due to a series of unforeseen events such as the trade friction between China and the United States and the spread of the New Crown epidemic,some private enterprises have been hit and have experienced increased competition,hindered financing and difficulties in transformation.In order to get rid of the unfavourable situation,many private enterprises began to actively explore the introduction of state-owned capital to alleviate the crisis,a phenomenon that has attracted widespread attention from society and academia.Jiangsu Zhongsheng Gaoke Environmental Co.Ltd.(hereinafter referred to as "Zhongsheng Hi-Tech")is one of the typical cases.Founded in 1992,Zhongsheng Hi-Tech originally focused its main business on a single business of industrial lubricants,and after its listing on the Shenzhen Stock Exchange in 2016,its business performance continued to decline,and it finally chose to introduce Suzhou City in 2020 In the same year,it completed the merger and acquisition of Zhongsheng Environment with the help of the state-owned capital,realizing the operation of dual main businesses.This paper takes "the motives and effects of introducing state-owned capital into private enterprises" as the core research content,trying to address the following two questions: what are the motives of introducing state-owned capital into private enterprises? What are the positive effects of the introduction of state capital on private enterprises and what are the mechanisms behind them? To address these two questions,this paper analyses the case of Zhongsheng Hi-Tech’s introduction of state-owned capital in Wuzhong District,Suzhou from three aspects: motivation,effect and negative impact.Through the analysis,it is found that the introduction of state-owned capital has had many positive effects on Zhongsheng Hi-Tech.(1)The transfer of control of Zhongsheng Hi-Tech to the state-owned capital has enhanced investors’ confidence and produced a good market effect.(2)With the help of state-owned capital,the governance capacity of CSCGC was improved,and the management team became younger and more professional,which enhanced the management level of the company.(3)With the support of state-owned capital,Zhongsheng Hi-Tech acquired a high-quality environmental protection enterprise,Zhongsheng Environment,which realized the operation of dual main businesses and enhanced the profitability of the enterprise.(4)With the help of state-owned capital background enterprises to obtain richer credit resources,the financial leverage was fully utilized.(5)The introduction of state-owned capital has effectively improved the human resources and research and development capabilities of Zhongsheng High-tech and significantly increased its growth capacity.However,the introduction of state-owned capital has also had some negative impacts on CSC,increasing the pressure of debt servicing and affecting the operational efficiency of the enterprise.The value of this paper is that,by taking the case of Zhongsheng Hi-Tech’s introduction of state-owned capital as a typical example,it builds an analytical framework for the study of the motivation and effect of the introduction of state-owned capital on private enterprises,and provides some reference for other private enterprises in China that intend to introduce state-owned capital on how to fully integrate with state-owned capital to bring about synergistic effects.