The Study On Reasons And Economic Consequences Of XCMG’s Mixed Ownership Reform

The state-owned economy has strong economic strength,controls the lifeline of China’s economy,and provides support for the socialist economy.In the process of developing the socialist market economy,state-owned enterprises have made great contributions to China’s social development.However,in recent years,they have encountered difficulties in their own development.Although they have the best resources and strong financial strength,their performance is inferior to that of many private enterprises.Not only is the unsatisfactory income and profit growth,but also some enterprises have become "zombie enterprise".It is also regrettable that a large number of state-owned assets are idle and wasteful.To help overcome this difficulty,the government has issued a package of policies to actively promote mixed ownership reform,encouraging eligible enterprises to introduce social capital so as to optimize governance structure,improve operating efficiency,and help promote the preservation and appreciation of state-owned assets.The reform of state-owned enterprises has gradually become a proposition of the time.With the launch of the four pilot reforms by the Party Central Committee and the Double Hundred Action,most of these enterprises began to explore mixed ownership reform.In the current period of accelerated reform,actively summarizing the experience of previous reform practices can provide guidance for subsequent actions.Based on the above background,this paper selects XCMG,one of the comprehensive pilot reforms of the Double Hundred Action,as a case company for analysis,explores the motivation behind the mixed-ownership reform and the economic consequences,and summarizes results and experience of the reform.XCMG is a well-known state-owned enterprise in China’s construction machinery industry.In 2019,Xuzhou State-owned Assets Supervision and Administration Commission approved the XCMG mixed reform pilot implementation plan.In 2020,XCMG transferred18.410943%,8.59177% and 6.13698% of XCMG LIMITED’s equity to JSGX Group,CCB Investment and BOCOM Investment,signed capital increase agreements with 12 strategic investors and established an employee shareholding platform.In the end,the state-owned shareholding ratio behind XCMG LIMITED dropped to 34.1%,and the mixed ownership reform was successfully completed.In the case analysis part,this paper firstly analyzes the motivation behind the reform,and then in order to discuss the economic consequences of the reform,this paper establishes four research dimensions of market reaction,corporate governance,production and operation,and financial performance.More specifically,it first analyzes the capital market’s reaction to XCMG’s mixed ownership reform event through the event study method,and secondly combined with the case,the changes in corporate governance and the impact on production and operation are expounded,thirdly uses the Du Pont formula to focus on the return on equity as an indicator to clarify the impact of mixed ownership reform on XCMG’s performance.Finally,based on the above-mentioned case analysis results,this paper summarizes the lessons for other state-owned enterprises in this reform,and puts forward relevant optimization suggestions.After research,this paper clarifies the motivation and economic consequences of this reform:(1)The reasons for XCMG’s implementation of mixed ownership reform include the influence of national policies,the fact that political connections hindering enterprise development,and the driving force of strategic goals.(2)The market’s reaction to XCMG’s mixed-ownership reform is relatively negative in the short term.(3)Mixed ownership reform has helped XCMG optimize governance by making the shareholding structure better and improving the incentive and restraint mechanism.(4)The investors introduced in the mixed-ownership reform have brought a positive impact on the production and operation activities of XCMG through their own business advantages and strong financial strength.(5)The mixed-ownership reform has improved the overall performance of XCMG,and behind the performance improvement is that the mixed-ownership reform has helped XCMG to improve its profitability;the mixed ownership reform did not significantly improve XCMG’s asset turnover;after the mixed ownership reform,XCMG’s performance was better than that of state-owned enterprises in the same industry that had not undergone the reform.