On the enterprise side, the enterprise will attract a certain amount of capital to invest in production and business, creating conditions for expansion, improving technological capacity and products, allowing the selection and gathering of good managers and businessmen into the management apparatus of the Company. In addition, the board of directors of the enterprise is the one who really decides to equitize and convert the enterprise. When converting to the form of a joint stock company, it has complete autonomy in production and business activities and is not bothered by administrative and subjective intervention of State management agencies. In addition, when equitizing an enterprise, converting the enterprise's capital into many parts and with many owners has an advantage over the State being the sole owner or holding the majority of the enterprise's capital. Creating many owners, at the same time when equitizing, it is possible to issue shares to the outside, list the company on the stock market, buy and sell capital on the market at the same time being able to mobilize new capital will create liquidity for the Enterprise to ensure the production and business activities of the Enterprise. Therefore, equitization of state-owned enterprises is considered an effective and inevitable solution to create a long-term and long-term capital mobilization environment for enterprises to invest in depth, innovate technology and competitive products in the domestic and international markets to create great momentum. Currently in Vietnam, the stock market cannot be said to be developing effectively, the number of listed companies is still quite limited, so promoting equitization to create public companies listed for equitization is a very encouraging thing.
On the part of workers, the number of workers in state-owned enterprises is large, but many of them are untrained or have been trained but have limited professional expertise and skills that are not suitable for the conditions of enterprises operating under market mechanisms, so labor productivity is low and quality is poor.
The product is not high. The team of business managers, especially the directors, are mostly not qualified enough to meet the requirements of economic development according to the market mechanism and are not trained and selected in a strict and systematic manner. Directors as well as employees are not highly responsible in promoting production activities in their enterprises. When equitization is carried out, the operating mechanism of the company changes, so it also requires a change in the thinking and perception of employees. First of all, these employees will have the right to buy shares, the right to own the enterprise, so they will be more motivated in their work, thereby helping to improve production and business activities for the enterprise.
3. Prospects for equitization development in Vietnam
As presented, the joint stock form is a form of production organization that contains a high socialization nature in a market economy. In Vietnam, the equitization with the main content of converting a part of state-owned enterprises into joint stock companies is essentially the transformation of the socialization form of the production process from the form of state-owned enterprises to the form of joint stock companies. The change here is not the socialized nature of production but the way of organizing production and business, in accordance with the transformation of the economic mechanism from the centrally planned model to the market economy.
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Establishment of State-owned Enterprise and Shareholding Agency.
From the perspective of a market economy, the socialized nature of the joint stock company compared to other forms of companies is very clear and as affirmed in the previous section, equitization is not privatization but only diversification of ownership, aiming to mobilize capital to serve the enterprise to operate more effectively.
But from the perspective of a socialist state, the view is that the implementation of transforming state-owned enterprises into joint-stock companies weakens the socialist nature. In this regard, it is necessary to clearly recognize that,
It is not that the larger the economic proportion of SOEs in terms of quantity, the higher the socialist nature of the economy, but the important thing is to improve the capacity and efficiency of these SOEs. Moreover, when implementing equitization, depending on the importance of SOEs, the State can still maintain a controlling stake in certain enterprises.
In short, it is necessary to distinguish the difference between SOEs and the strength of the State economy. In particular, what needs to be strengthened to ensure the maintenance of the socialist orientation of the economy is the economic strength of the State, which is viewed as a whole, not as a part of the tools of SOEs, which is viewed locally. Therefore, in maintaining the socialist orientation of the economy, SOEs themselves are only a means, not an end.
Therefore, with the motivations for equitization as presented above in Vietnam, Vietnam also needs to have the necessary conditions for the equitization process to be favorable. The stock market is an important channel to attract capital from society for investment and development. Vietnamese enterprises in general, as a part holding a leading position in the economy, cannot help but become a pioneering force in contributing to creating and strengthening the stock market by directly participating in the activities of this market. However, participating in the stock market requires a certain amount of time to prepare carefully, so there needs to be a strong enough legal regulation to promote joint stock companies listed on this market.
4. China's experience in equitization
4.1 Some experiences in equitization in China
China was an early adopter of socialism. Comparisons with China's experience with privatization are particularly important because
The similarities in political systems between Vietnam and China are not completely identical, but there are still some similarities.
First of all, to carry out equitization, China clearly defined its equitization viewpoint, which is to carry out equitization according to the Marxist ideology, considering equitization as a part of the market economy to create an effective business mechanism rather than seeking different economic forms. That is to expand and develop the market economy and readjust the role of the State economic sector, which is no longer as large as before.
China has carried out the equitization of state-owned enterprises extensively by building and perfecting the legal system and the system of legal documents related to the operation of enterprises. Many laws have been issued and put into effect in the lives of enterprises. The "Law on Industrial Enterprises under the State Ownership Regime" has given enterprises more autonomy in production and business, contributing to removing administrative constraints and returning enterprises to the right market cycle. To concretize the "Law on Industrial Enterprises under the State Ownership Regime", on July 23, 1992, China issued the "Regulations on the Transformation of the Business Mechanism of Industrial Enterprises under the State Ownership Regime" with the content of not only continuing to enhance the autonomy of enterprises, but also reflecting the new trend in reform, which is the transformation of the business mechanism.
The forms of CPH include a variety of:
Sell part of the enterprise value to individuals and organizations outside the enterprise through selling shares and transforming the state-owned enterprise into a joint stock company in which the State holds controlling shares.
Sell most of the asset value of state-owned enterprises through selling shares to all subjects, in which the State is a shareholder but does not hold controlling shares.
Sell all state-owned enterprises to private individuals to form private companies or joint stock companies.
Maintain state capital and call for additional capital from other shareholders to convert into a joint stock company.
During the period 1993-1997, when implementing the 9th Five-Year Plan, the Communist Party of China clearly identified building an enterprise system as the central task, according to which new enterprises had four characteristics:
Clear property ownership
The rights and responsibilities of all subjects are clear.
Government and business are separate.
Scientific management.
Many new measures related to equitization were applied, such as establishing a central enterprise management company and turning equitized companies into subsidiaries of the management company; separating important activities from state-owned enterprises and converting enterprises into joint stock companies; and promoting the attraction of foreign capital into equitized enterprises.
In 1997, the 4th Central Conference of the 15th term of the Communist Party of China put forward new arguments on economic institutional reform, and also mentioned a number of issues such as: Enterprise property rights, enterprise management and operation, equitization... For enterprises that have started to equitize, the Chinese Government has implemented a number of effective measures such as: Encouraging asset mergers, standardizing bankruptcy, converting debt into shares, assisting enterprises in technical renovation, expanding capital planning, and solving unemployment problems for workers. For enterprises that have been equitized, the Government has created conditions for enjoying a number of incentives such as: Tax rates, corporate income tax, especially tax reduction in the first years of operation. For enterprises that have achieved high results in production and business after equitization, they will be given favorable conditions to participate in the market.
stock market, enjoy financial incentives such as reserving 10% of the company's shares to reward with shares for the company's leaders and employees, etc.
It can be said that the fundamental purpose of implementing the shareholding system in China is to change the property ownership system in which the State has always played a monopoly role in the past, to form a diverse structure of property ownership within enterprises, and to optimize the corporate governance structure. This is the most fundamental and long-term benefit of equitization of state-owned enterprises in China. The most outstanding achievement is that by the 3rd Plenum of the 16th Central Committee of the Communist Party of China (2004), the shareholding system has been widely implemented "as the main form of implementation of the public ownership system".
The number of large-scale enterprises equitized in China also occurred earlier, starting in 1998, and this has only happened very recently in Vietnam. China's equitization program also has another advantage: "outside shareholders have a significant active role in the management of enterprises. This group of shareholders often tends to moderate the traditional dominant role of the Party and trade unions". In addition, the important financial institution supporting the success of the equitization program, the stock market in China, also developed earlier and now accounts for a significant part of the national GDP.
4.2 Lessons learned from equitization in China
Building and thoroughly implementing a correct concept and goal of equitization, consistent with the nature of the social regime: transforming state-owned enterprises into joint stock companies is to attract capital from outside, encouraging the development of non-state economic sectors.
Experience in State asset management, the content of equitization is to adjust the relationship of property rights to State assets, China has created a system of authorities and business supervisors.
State assets. Establishing a professional and powerful State assets appraisal agency is necessary.
It is necessary to diversify the forms of equitization so that the state-owned enterprise sector can choose the form that best suits them, which also speeds up the equitization process.
The Chinese government focuses on stimulating demand and creating the initial foundation for the formation of a domestic capital market. In addition to expanding the scope of sale so that citizens can participate in the equitization program, the government also has measures to support initial capital for employees in enterprises, has appropriate interest rate and financial policies, expands the purchasing market, including selling to foreigners and converting debt into investment capital. In addition, there are measures to ensure the rights of investors, ensuring that the invested capital is profitable. The reform of SOE equitization needs to be coordinated with the reform of financial and monetary institutions, the development of financial markets and securities trading to create momentum for equitization.
CHAPTER II
CURRENT STATE OF EQUITIZATION OF STATE-OWNED ENTERPRISES IN VIETNAM
I. STAGES OF EQUITIZATION
1. Pilot phase of equitization (1992 – May 6, 1996)
The policy of equitization of State-owned enterprises was stated by the government in Decision 217/HDBT dated November 14, 1987 in Article 22: "The Ministry of Finance shall study and organize a trial of buying and selling shares in a number of enterprises and report the results to the Government by the end of 1988". However, the specific conditions at that time were still subsidized regimes for State-owned enterprises, so the equitization of these enterprises was not successful.
In 1990, the Government issued Decision 143/HDBT, which stated: “Research and trial the conversion of state-owned enterprises into joint stock companies”. At that time, there was no corporate law and there was a lack of consensus on viewpoints, so this decision could not be implemented.
Resolutions of the 2nd Central Conference of the 7th tenure, Resolution 10 of the Politburo, Notice No. 63 TB/TW of the Politburo, Resolution of the 8th National Congress of Delegates, Resolution of the 10th session of the 7th National Assembly on December 26, 1991, Resolution of the 6th session of the 9th National Assembly on December 1993 all advocate:
Implement step by step the equitization of a part of enterprises where the State does not need to hold 100% of capital to prevent negativity and promote effective business of SOEs.
It is necessary to conduct a pilot project, closely direct, and carefully draw experience before expanding the appropriate scope. It is necessary to implement forms of equitization with appropriate levels according to the nature and field of production and business, in which State ownership accounts for the controlling proportion of shares.