The Managerial Incentive Problem Under the Mixed-Ownership Structure

This chapter provides a comprehensive conclusion to the discourse on the mixed-ownership reform of state-owned enterprises (SOEs) in China. It underscores the centrality of property rights reform and the critical role of promoting diversity in investment subjects and marketization of operations through the transition to mixed ownership. The chapter advocates for classification reform synchronized with supervision, highlighting the importance of distinguishing between SOEs with public welfare goals and those driven by profit-making objectives. It revisits the Temasek model as a benchmark for effective state capital management and critiques the traditional and Huijin models of state asset management, suggesting areas for improvement. Additionally, it addresses the challenge of differentiating between “marketized executives” and “executives from within the system,” advocating for the phasing out of the latter to enhance the professional manager system in SOEs.