The Shenzhen Special Economic Zone (SEZ) in Guangdong Province has introduced corporate, employee and property rights circulation systems in a bid to invigorate its enterprises.

Shenzhen has tried to introduce the corporate system since the beginning of this year. To date, the Shenzhen City People's Congress has adopted a series of regulations concerning limited-liability stock firms.

Shenzhen, where flexible policies are being pursued to attract overseas investors, is considered a pilot city for new measures to deepen China's reform and opening to the outside world.

According to a local economist, enterprises in the city now fall into four categories: limited-liability stock companies, limited-liability companies, unlimited-liability companies and stock cooperative companies.

All state-owned enterprises in Shenzhen will be turned, step by step, into either limited-liability stock companies or limited-liability companies, a municipal government official said.

So far, 157 enterprises have come under these categories. Of these, 35 companies have listed shares on the Shenzhen Stock Exchange, among which 21 are state-owned businesses.

Meanwhile, urban and rural collectively-owned enterprises in the city with assets valued totaling 7 billion yuan, have been streamlined into 70 stock cooperative companies.

Economists believe that the corporate system should inject vigor into enterprises because it clearly defines property rights, separates government administration from enterprise management, and enables enterprises to become independent entities responsible for their profits and losses.

They agreed that the fundamental reason for state-owned firms' poor efficiency is that their property rights are not clearly defined. As a result, nobody is responsible for maintaining or increasing the value of enterprises' assets.

They noted that another measure to invigorate enterprises is to introduce the employee system, so as to lessen the wage disparity between white-collar and blue-collar workers, and between permanent and contractual workers.

This reform measure makes it possible to effect a two-way choice of jobs, that is, people are free to choose their jobs and enterprises to choose their employees.

Economists shared the view that this measure will help the establishment of a labor market characterized by fluidity and competition.

The third reform measure Shenzhen has adopted is to use internationally accepted indexes - assets, profits and taxes, and sales - to assess the performance of an enterprise and rate enterprises according to their economic returns.

Wages and fringe benefits of business executives and employees will be tied to assessment and rating, which will be conducted once every twoyears.

Economists pointed out that this measure encourages firms to introduce an economic return-based incentive system and creates an environment of fair competition.

Another reform step is to establish a property rights circulation system in order to promote enterprise mergers, the transfer of property rights and a lawful and orderly disposal of enterprise bankruptcies.

The Shenzhen Property Rights Exchange opened early this year to facilitate property rights circulation and commercialization. By the end of October, 54 enterprises had transferred their property rights and stock rights on the exchange, in the amount of 140 million yuan.