Research on Qianyuan Asset Management Company’s Disposal Strategy to Jinli State-owned Real Estate Zombie Enterprise

Last modified: July 10, 2021
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Project Title: Research on Qianyuan Asset Management Company’s Disposal Strategy to Jinli State-owned Real Estate Zombie Enterprise
Author: Miss Wang Bo
Advisor: Dr. Zhang Li
Degree: Master of Business Administration
Major: International Business Management
Faculty: Graduate Schools
Academic year: 2020
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Conference
Conference Proceedings
National and International Academic Conference “Innovation and Management for Sustainability” 9-10 July 2020

Citation

Wang, Bo. (2020). Research on Qianyuan Asset Management Company’’s disposal strategy to Jinli State-owned Real Estate Zombie Enterprise. (Independent study, Master of Business Administration). Bangkok: Siam University.


Abstract

The term “zombie enterprise” was first proposed in 1987.  Despite their ongoing production and business activities, this phrase refers to enterprises with low-benefit, long-term loss and insolvency, and can no longer repair themselves and develop. Zombie enterprises are different from general problem enterprises. They maintain daily function through long-term reliance on bank lending and other methods, so they maintain the traits of kidnapping and extortion. Previous work on “zombie enterprises” focused on the “lost decade” in Japan. This knowledge showed a break-away from inadequate supply and cutting overcapacity.  Targeting those “zombie enterprises” under supply-side structural reform was witnessed in China.  According to the data of SASAC in 2016, a total of 2,041 “zombie enterprises.”  They were found chiefly in state-owned and “particularly poor enterprises and involved assets of 3 trillion yuan.    A proper disposition of “zombie enterprises” was the key. It provided an understanding of “three cuts, one decrease, one remedy” and deepened supply-side structure reform. It also can reduce and defuse the risk of local government debt default. Moreover, it is a meaningful way to “deleverage” the state-owned economy and the essential requirements of financial risk prevention.

In the scientific and effective treatment of state-owned zombie enterprises, such enterprises’ formation and exit mechanisms should be analyzed and studied. The problems of such enterprises have received some attention in relevant policy discussion; based on the domestic treatment of zombie enterprises on relevant foreign experience as a reference, their own experience was found gravely insufficient. The information was unable to create qualitative analysis, so there was insufficient theoretical and practical research. Concurrently, the existing research mainly focused on external factors. In order to achieve “clearing” these companies, a series of social problems, such as the increase in the unemployment rate, will occur. These findings reveal that reasons for its formation should be analyzed based on the enterprises’ internal motivations to effectively achieve the zombie enterprises to overcome deadlock and turn losses into profits.

Regarding the circumstances of Qianyuan asset management company and Jinli state-owned real estate enterprise, this paper recommended a scheme of classification disposal and optimization management of Jinli state-owned real estate’ zombie enterprise. Furthermore, a reconstructing of zombie enterprise management and its risk control disposal of Jinli state-owned real estate zombie enterprise suggested referencing other researchers.

Keywords: asset management company, zombie company, classified disposition, management optimization strategy.


Research on Qianyuan Asset Management Company’s Disposal Strategy to Jinli State-owned Real Estate Zombie Enterprise

Master of Business Administration (International Program), Siam University, Bangkok, Thailand

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