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| Author: | Cheng, Li |
| Title: | The rational thinking of the troublesome businesses with a high institutional deficiencies in circulating capital (original in Chinese) |
| Journal: | Research on Financial and Economic Problems (c)
1998 : 9, p.39-41 |
| Index terms: | DEBT PUBLIC CORPORATIONS MANAGEMENT CAPITAL CHINA |
| Language: | chn |
| Abstract: | The essay analyses state-owned enterprises' problem of high debts by making use of the theory of capital structure and reaches the conclusion that high debts result in huge financial crisis costs for enterprises. Under specific circumstances in China, state-owned enterprises almost have no danger of bankruptcy. Thus the real harm of high debts lies in its distortion of enterprises' business behaviors. Such is the reason why state-owned enterprises are stuck in the mire and fail to get rid of it. Finally, the essay presents such methods as reorganizing by making use of debts improving enterprises' profit-making capability to solve the problem, reshape the new type of relation between bank and enterprise, and speed up the paces of reform and development of state-owned enterprises. |
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