21-9 CONDITION OF REFORM AND STANDARDIZATION OF
ENTERPRISE GROUPS(1999)
Item Number Percentage
of Units (%)
Number of Total Enterprise Groups 185 100.0
By Establishment of the System of a Parent Company and its Subsidiaries
    Established 140 75.7
    Non-established 45 24.3
By Function of Parent Company
    Pure Governance Company 42 22.7
    Mixed Operation Company 143 77.3
By Execution of Consolidated Accounting Statement System of Group
    Executed 141 76.2
    Non-executed 44 23.8
Establishment of Capital Contributor System of Parent Company
    Established 143 77.3
        Capital Contributor has Power to make Significant Operating Policy 143 77.3
       Capital Contributor has Power to Chose the Enterprises Operator 124 67.0
      Capital Contributor has Power to Collect Assets Income 97 52.4
    Non-established 42 22.7
By Establishment Condition of Parent Company Organizational Structure
    Stockholders' Meeting Established 108 58.4
    Board of Directors Established 162 87.6
    Board of Supervisors Established 126 68.1
By Emergence of the General Manager of Parent Company
    Appointed by the Board of Directors 101 54.6
    Directly Appointed by Administrative Department at the Higher Level 42 22.7
    Designated by Investment Agency Authorized by the Owner of State Assets 1 0.5
    Nominated by Administrative Department at the Higher Level and Appointed by the Board of Directors 32 17.3
    Others 9 4.9
Implementing 'Nine-Major' Policies to form a Complete System of Groups
    With 'Self -decision Making Right' of Investment 169 91.4
    With Right to Finance Externally 32 17.3
    With Right to Guarantee Externally 124 67.0
    With Right to Engage in Import and Export Trade of Products on Its Own Account 89 48.1
    With Right to Pay Consolidated Taxes 72 38.9
    With Right to Contract Projects and Cooperate with Foreign Countries 91 49.2
    With Right to Examine and Approve Foreign Affairs 18 9.7
    Technical Research and Development Center Established 94 50.8
    Finance Company Established 40 21.6
By Listing of Member Companys of Group
    With Member Company Listed 26 14.1
        Number of Listed Companys 26 --
        Type of Shares Issued by Listed Company
            (1) A Shares 26 --
            (2) B Shares --
            (3) H Shares 3 --
    No Member Company Listed 160 86.5
Methods for Groups to Expand Scales
    Bank Loans and New Construction Projects 159 86.0
    Merging and Purchasing Other Enterprises by Means of Marketing 119 64.3
    Financing in Capital Market through Shares and Bonds 62 33.5
    Joint-venture and Joint-owned with Foreign Enterprises 26 14.1
    Assets Restructuring by Means of Property Right Division 99 53.5
Main Obstacles of Mergers, Acquisitions and Assets Restructuring
    Regions and Departments are Separated 39 21.1
    The Reform of State-owned Assets Management System is Lagging 104 56.2
    Immperfection of Capital Markets and Property Right Trading Markets 91 49.2
    Bad Debts in Bank of Enterprises Mergered 113 61.1
    Incapable of Placement of Staff and Workers from Enterprises Mergered 112 60.5
    Immperfection of Market Intermediary Institutions 21 11.4
Main Problems of Internal Management Faced by Enterprises Group
    Relationships of Internal Property Right not Straighten out 107 57.8
    Immperfection of the System of a Parent Company and its Subsidiaries 108 58.4
    Absence of Incentive and Restraint Mechanisms for Operators 115 62.2
    Weakness of the Functions of Departments of Property Right Management 73 39.5
    More Intervention of Administrative Department at the Higher Level 37 20.0
Standardization of Consolidation of Enterprises Groups
    Standard Consolidation 38 20.5
    Nonstandard Consolidation 147 79.5
        Registered Capital of Parent Company below 50 Million Yuan 76 41.2
        Registered Capital of Parent Company and Its Subsidiaries below 100 Million Yuan 112 60.5
        Number of Subsidiaries below 5 104 56.2
        No Subsidiaries 39 21.1