The Motivation And Performance Analysis Of Private Enterprises To Introduce State Capital Bailout

In recent years,affected by the economic cycle,China’s macro economy has been on a downward spiral and the capital market has fallen into a downturn.At the same time,to maintain economic stability,the state has increased its efforts to deleverage,making it more difficult for Chinese enterprises,mainly private enterprises,to raise funds and their business difficulties increasingly prominent.As an important support for the real economy,helping private enterprises to relieve their difficulties is a strategic measure for the national economy to make up for shortcomings and stabilize growth.Combined with the current policy context of mixed ownership reform of state-owned enterprises,the government’s support for private enterprises has been increasing,and there are more and more cases of relief through its institutions by means of state-owned equity participation.This paper focuses on the specific mechanism and the effect of the introduction of state-owned capital to bail out listed private enterprises,starting from the case of Jieshun Technology’s frequent stock pledges leading to capital chain crisis.The study finds that,first,multiple factors contributed to the introduction of state-owned capital in Jetsun Technology.The study found that: First,multiple factors contributed to the introduction of state-owned capital to Jetsun Technology.The most important reason for high-quality private enterprises to seek bailout financing is the internal and external environment that makes it difficult to raise funds,coupled with the lack of awareness of financial risks in the financing process,resulting in a high percentage of equity pledges,which aggravates operational risks.In addition,the strengthening of government-enterprise relations and the use of state-owned platforms is also an important reason for the introduction of state-owned capital in private enterprises.Second,the entry of state-owned capital to relieve distress plays a positive role in the performance of listed companies.State-owned capital into the bailout relieves the capital pressure of the enterprise,makes a positive shift in the internal governance mechanism of the private enterprise,and the equity structure checks and balances each other,which is conducive to the improvement of the financial performance of the enterprise.After completing the bailout Jieshun Technology uses the resource advantages of TCDC Intelligent Transportation to expand its business scope to quickly capture the market and drive revenue growth with the state-owned capital platform.Third,the long-term effect of the bailout is limited.In the year of the introduction of state-funded bailout,the financial performance indicators of enterprises have improved,but the improvement is limited,so private enterprises should actually improve the core competitiveness of the company after the completion of the bailout,strengthen the communication with the government level,further play the synergy effect and improve the long-term business capacity.