The reform of state enterprise system has been the foremost part of the reform process in China since she had proclaimed often door policy together with economic system reform at December 1978. Even though it is generally being accepted that the syste...
The reform of state enterprise system has been the foremost part of the reform process in China since she had proclaimed often door policy together with economic system reform at December 1978. Even though it is generally being accepted that the system reform has been quite successful in China comparing with those of other former socialist countries in once-called eastern europe before, there is no clear evidence yet to have succeeded specially in the field of state enterprise reform. So China has been executing three major reform programs as a millenium project in the sectors of state enterprise system, financing market rood governmental organization that are quite closely interrelated one another in the viewpoint of governance structure of state enterprise system.
Since 1992, the year when China has defined her economic system as socialistic market economy or market economy of socialism, she has been experimenting a thoroughly different system's reform from the conventional system of socialism in terms of social paradigm or ideology. The focal point of this reform process is introducing a market for property rights combined with a capital market.
This paper tries to review all the reform process of Chinese state enterprise system from 1978 when starting her system's reform at the viewpoint of 'ser-M' approach developed by Cho & Lee(1995). In this approach, 's' denotes as a CEO(subject) of a firm, while 'e' as business environment and 'r' as resources of a firm respectively, where 'M' means for interaction mechanism among above three factors. This paper suggests that the process of reform for chinese enterprise system is on the verge of drastic chage in terms of governance structure from power delegation to limited corporation. The proclamation of market economy including capital & property one makes it possible for China to reform the state enterprise system into contemporary limited corporation system. The reform of labor market which not only external but also internal including CEO's, also plays a very important role as a pushing factor for the state enterprise reform. Finally, stepwise and try & error-based reform process makes it possible for China to minimize a transaction cost of purchasing(or selecting) a reform product for institutional change thru learning mechanism.