Microeconomic

Second session of the National People's Congress March 5, 2017, the Li Keqiang in his government work report:
the market play a decisive role in the allocation of resources and better play the role of government, we must deepen __ decentralization, put the tube combine, optimize service reform. __ This is a profound revolution in the government itself, to continue with courage ton output capacity, split Jing chopped thorn resolutely forward.

Market players

definition

Refers to the economically active market players in the market, individuals and organizations enjoy rights and obligations. Specifically, it is the natural person or legal entity.

Types of

• Enterprise (the most important subject market presence and development)
• government
• Institutions
• family
• Agency

Modern Enterprise System

Outline

Market-based economy, the legal system as the main enterprise, limited liability system as the core, property rights clearly established, separating the new enterprise system management science criteria. Ltd. is a typical form of modern enterprise system.

• Modern enterprise system of property rights
• Modern enterprise management system
• Organization Institution of Modern Enterprises

Similarities and differences between limited liability companies and joint stock of

Types of	limited liability company	Ltd.
Different registered capital	There is no minimum limit	There is no minimum limit
Different number of shareholders	2-50 people	Sponsor 2-200 people, after the establishment of the number of shareholders not less than the number of initiated, but no upper limit
It is divided equal shares	Not divided	Divide
Whether public offering	private	Publicly
Share transfer provisions different	The transfer of ownership of shareholders must obtain the consent of the Company and the priority assigned to the shareholders of the original company	The stock can trade and transfer
The company publication of accounts situation	Generally not public	Public within the statutory range
Different Corporate Governance	Relatively simple	More stringent, including general shareholders meeting, chairman of the board of supervisors, managers and other institutions
Industrial and commercial registration matters	Company name, legal representative's name, address, registered capital, business scope	Ltd. with
Registered capital registration mode	Subscription Capital System	Initiated the establishment - subscribed capital system, set up to raise - paid-in capital system
The minimum registered capital	no	no
verification	Do not need	Do not need
Capital reduction	There is no minimum limit	There is no minimum limit

Zhongdianfatiao

"Company Law" Article 23: establishment of a limited liability company shall satisfy the following conditions

1. Shareholders quorum
2. There are in line with the articles of association of all shareholders subscribed capital contributions
3. Shareholders have jointly formulated the articles of association
4. Company name, the establishment of the organization in line with the requirements of a limited liability company
5. Company has a domicile

Two policy

A natural person is allowed to set up a one-man company, the company has not set up a one-man company

The corporate governance structure of

Shareholders' meeting

Shareholders will also be called general meeting of shareholders is the company's highest authority.
+ Elect directors and supervisors, given charter, audited financial, given survival

Statutory authority

"Company Law" Article 37: Shareholders will exercise the following powers

1. Decide on the business policy and investment policy
2. Election and replacement of non-served by staff on behalf of the directors, supervisors, decisions relating to directors and supervisors remuneration
3. Consideration of the report approved by the Board of Directors
4. Examine and approve reports of the board of supervisors or supervisors
5. To consider and approve the annual financial budget and final accounts
6. Examine and approve the profit distribution and recovery of losses
7. To decide on an increase or decrease of registered capital
8. Decide on the issue of corporate bonds
9. Resolutions on the merger, division, dissolution, liquidation or change in corporate form
10. Amend the Articles of Association
11. Other terms of reference of the Articles of Association

Board of Directors "rich man's club."

The Board of Directors will be elected by the shareholders, the company's legal representative

• Executive resolution, set plans, system program, the election manager

Statutory authority

"Company Law" Article 46: The Board will be accountable to the shareholders, exercise the following powers

1. Convene a shareholders' meeting, and to report to shareholders
2. Resolutions of the shareholders' meetings
3. Decide on the business plan and investment plan
4. The development of the company's annual financial budget and final accounts
5. Formulate plans for profit distribution and recovery of losses.
6. The company developed increase or decrease of registered capital and the issuance of corporate bonds
7. Development of merger, division, dissolution or change in corporate form of program
8. The company decided to set up internal management structure
9. We decided to appoint or dismiss managers and their remuneration, and decided to appoint or dismiss the deputy manager on the nomination of managers, financial officers and their remuneration
10. Formulate the basic management system
11. Other terms of reference of the Articles of Association

Zhongdianfatiao

"Company Law" Article 22: Resolutions of the shareholders' meeting or general meeting of shareholders, board of directors violate laws, administrative regulations invalid. The resolution of the board of directors violate laws, administrative regulations invalid. The shareholders' general meeting, the board of directors of the procedures for convening meetings, voting in violation of laws, administrative regulations or the articles of association or the resolution violates the Articles of Association, the shareholders may from the date the resolution is made within 60 days request the court to revoke.

Board of Supervisors "poor club"

Board of Supervisors is the supervisory authority under the shareholders (large) will lead, with the board arranged in parallel, the Board of Supervisors by the shareholders (large) Supervisors and Supervisor democratically elected employees of the company will be elected consisting of the company's business activities supervision and inspection legal and will set up a permanent establishment. To exercise oversight of the internal organization of directors and general manager of the administrative system. In order to ensure the independence of the board of supervisors and supervisors, the supervisor may not serve as directors and managers

"Company Law" Article 51: A limited liability company Supervisory Board, whose members shall not be less than three. Fewer or smaller number of shareholders limited liability company may have one or two supervisors, no board of supervisors.
"Company Law" Article 52: term of a supervisor shall be three years. Supervisors term of office, re-election

Statutory authority

"Company Law" Article 53: Board of Supervisors shall exercise the following powers:

1. Financial Inspection
2. For the acts of the directors duties of senior management oversight, in violation of laws, administrative regulations, directors, articles of association or shareholders' resolution, put forward proposals on the removal of senior management
3. When the acts of the directors and senior management personnel harm the interests of the company, require directors and senior management to be corrected
4. Convene and preside over the shareholders 'meeting when the proposal to convene an extraordinary meeting, convened not fulfill the provisions of this law and presided over the shareholders' meetings of the Board responsibilities
5. A proposal to the shareholders' meetings
6. In accordance with the provisions of Article 152 of this Act, the directors, senior management proceedings
7. Other terms of reference of the Articles of Association

Not the case according to law as an executive

"Company Law" Article 146: any of the following circumstances shall not serve as directors, supervisors and senior management

1. No civil capacity or with limited capacity for civil conduct
2. Embezzlement, bribery, embezzlement, misappropriation of property or destruction of the socialist market economic order, was sentenced to criminal law, beyond five years, or deprivation of political rights for crime, beyond five years
3. As the liquidation of companies, corporate directors or director, manager of the company, corporate bankruptcy personally liable, since the company, the date of completion of bankruptcy less than three years from the liquidation
4. The date as a result of illegal business license revoked, ordered to close the company, the company's legal representative, and personally liable, since the company, company business license was revoked less than three years
5. Large individual amount of debts due and outstanding

Market mechanisms

concept

The market mechanism, based on the sum of the price of the core __ __ inherent function of the various markets.

• Market mechanism into full play the premise: a complete, unified market system

classification

• Supply and demand mechanism
• The price mechanism
• Competitive mechanism
• Risk mechanism

Supply and demand mechanism

Refers to the mechanism of mutual restraint between commodity supply and demand and price, competition and other factors play a role of contact.

• Influenced by supply and demand and price competition, and changes in supply and demand, but also cause the price and compete.
• Supply and demand is the main mechanism of the market mechanism.

Price mechanisms:

The use of price means an enterprise, through the price increase, maintain or reduce, as well as competitor pricing or price change of flexible reactions to compete for market share with competitors a competitive way.

• Enterprise market through price competition, the impact of commodity prices, the allocation of resources. The price mechanism is the core mechanism for allocation of resources.
• Under market conditions, the market mechanism as the basic means of resource allocation, resource allocation plays a decisive role __ __.
• __ __ price formation mechanism of the price mechanism is the core content

Competitive mechanism

Competitive mechanism is one of the elements of the market mechanism, the means and methods of economic activity in commodity survival of the fittest.

• universality
• Irritating. Stimulate each stakeholder initiative

Risk mechanism

__ risk mechanism is the basic mechanism of the market mechanism __

• Operating in the market, any company engaged in the production and management will be faced with the risk of profit, loss and bankruptcy.
• The price mechanism can affect the risk mechanism, price fluctuations can encourage enterprises to take risks, to chase profits.

Market system

Market system so interconnected organic unity of all kinds of markets.

• __ commodity markets, capital markets, labor markets __ is the basic content market system, the three pillars of the market system.

The essence of supply-side reform

The formation of new body

• __ __ market play a decisive role in the allocation of resources
• Decentralization
• Transformation of government functions, restrain government's "visible hand"

Cultivate new power

• To cultivate new growth drivers through a comprehensive reform
• __ __ innovation through a comprehensive new economic growth point,
• To achieve sustainable economic development by increasing total factor productivity

The development of new industries

• Promptly resolve excess capacity and the elimination of corporate zombies
• To develop new industries, new technologies, new formats

Competition and monopoly

Market type	The number of firms	Nature of the product	Typical sector	New firms join
Complete monopoly	One	Product characteristic	Utilities	impossible
Perfect competition	a lot of	Undifferentiated products	Farm produce	easily
Monopolistic Competition	a lot of	Undifferentiated products	light industry	Easier
Oligopoly	Several	Products differ	Heavy industry	Easy

Balanced aggregate demand and aggregate supply

Inflation, price inflation, deflation, prices fall

Type	inflation	Deflation
substance	Aggregate demand is greater than the total supply	Aggregate demand is less than the total supply
the reason	Circulation of banknotes in circulation exceeds the actual amount of money needed	Less the amount of money issued banknotes in circulation actually need
harm	Inflation, currency devaluation	Falling prices, currency appreciation
Countermeasure	Control the money supply and credit scale	Expanding domestic demand, stimulate consumption

The main factors affecting the price

1. Price (most affected)
2. Good job
3. income
4. Related commodity prices (complementary products and substitutes)

Complements and substitutes

concept

1. alternatives
if the price of a good rises due to increased demand for other goods, then these two items are regarded as alternatives.

1. Complements
   refers to a desire to meet together in two commodities, complement each other, such as left shoes and right shoes are complementary products, bread and bread is the alternative to more expensive bread, consumer demand for bread to rise, and the left expensive shoes, consumer demand for the right shoe will drop with.

The relevant test sites

opportunity cost

In order to get something to give up and the maximum value of something else. Commercial companies, the use of a certain time or resources to produce a commodity, and lose the opportunity to use these resources to produce other best alternative is the opportunity cost .
For example: fish and bear's paw can not have both

Sunk costs

That due to past decisions already taken place, and not Put these expenditures have incurred irrecoverable, such as time, money, effort, etc. become a "sunk cost" by the cost of any present or future changes in decision-making.

• For example: spilled milk

External costs

In addition to the direct burden of the private cost of goods, part of the product by the society as a whole than the cost borne by the manufacturer called external costs.

• For example: a fertilizer plant in the sewage discharged into the river without treatment, equal to occupy a section of the river as sewage disposal sites, in fact, constitute a part of the product, but manufacturers do not pay any fees for this purpose that part of the cost that is borne by society. namely external costs.

Diminishing marginal utility

Diminishing marginal utility means within a certain time, at a number of other consumer goods remained unchanged conditions, when a person continuous consumption of certain goods, to increase the number of the article with the consumer, the total utility (total utility) although a corresponding increase, but the marginal utility of goods (marginal utility, that is, the article, which will lead to increase the amount of utility consumption per one unit) has a decreasing trend.

• For example: irises and orchids into the room, long and not smell their fragrance

Negative external utility

Also known as external diseconomies, are costs that could not be reflected in the price of, a third party other than the parties to the transaction brought in.

• For example: Gates of fire, adverse impacts to fish

marginal cost

In economics and finance, the marginal cost refers to the per unit production of the new product (or products purchased) increment brought the total cost. Is used to determine increase / decrease in the economic production is cost-effective

• For example: "highbrow" explained the price of goods is too high, it can buy less people so we want to set the price in a reasonable range, that is, the price at marginal cost.

Fixed costs

Fixed costs (Fixed Cost), (also known as fixed costs) relative to variable costs, refers to the total cost within a certain time and a certain volume of business scope, not increase or decrease the volume of business and the impact of changes to keep costs unchanged.
Such as depreciation of plant and equipment, property taxes, rents, management salaries, new product development costs, advertising costs, staff training fees

Variable costs

Variable cost (variable cost) means the fee paid to the various changes in factors of production, such as the purchase of raw materials and power consumption costs and workers' wages. This cost varies with the production, often to be paid until after the actual production process begins.

Income and Distribution System

Economic and distribution system

__ basic economic system determines the distribution system, __ distribution system is an important part of the economic system. Distribution according to work is dominant and diverse modes of distribution coexist, distribution according to work and distribution according to production factors combined.

Distribution according to work

By social workers to provide personal consumer goods distribution principle is recognized by the amount of labor society, both in the number of labor but also the quality of labor, overall performance is allocated as contribution __ __ labor by workers.

Distribution according to work to achieve the characteristics

1. Distribution according to work is the initial stage of the main, but not the only principle of social distribution
2. The same amount of labor to receive the same amount of consumer goods principle, but also according to uniform standards can not be achieved within the scope of the whole society-public economy
3. Distribution according to work is not yet time for each worker to scale, only to realize the magnitude of value of goods exchanged indirectly reflect the amount of labor as the standard
4. Distribution according to work must be implemented by means of the form of commodity money

Distribution According to Factors

1. Distribution According to the owner of a factor of production with elements of ownership, access to economic behavior reward factors of production users from there
2. Constitute factors of production include: labor, technology, human resources, capital, management, land, housing and so on.
   • It exists in the private sector and foreign companies
   • Distribution according to work is state-owned enterprises

Primary distribution and redistribution

Primary distribution

In accordance with the allocation of production factors __ __ size of each contribution to national income, mainly formed by the market mechanism __ __

Redistribution

It refers to on the basis of the initial distribution on the part of national income out to be redistributed by __ __ taxation and social security systems, the main role of government regulation __ __ mechanism.

The third assignment

That is to mobilize social forces __ __, __ establishment of social assistance, private donations, charity, volunteer action __ and other forms of systems and mechanisms of social solidarity supplement to government regulation.

---

Related Links

1. Company Law of People's Republic of China