Since the end of the 1970s and the beginning of 1980s with the political and economic system
changes in the world some enterprises being operated on the basis of market mechanism have
emerged in the economy which once implemented the planning resource allocation (such as former
Soviet Union countries in eastern Europe and Mainland China countries in Southeast Asia such
as Vietnam). As the operation mode which complies with the market mechanism is adopted early in
terms of the property right and operation mechanism these enterprises grow rapidly under the
loose regulation of the government and in the rapid development of the domestic market. However
with the competition intensified and the internationalization degree increased in the domestic
market of the transitional economy a large number of enterprises have suffered declined
business insolvency bankruptcy or even winding-up since the 1990s. Some enterprises which
grow rapidly in the 1980s are deep in the business operation crisis or even go bankrupt in the
middle and later stage of 1990s. This is best demonstrated by the companies which are listed at
Shenzhen Stock Exchange Mainland China in the early stage. According to the report in
International Finance News March 6 2002 9 local listed companies in Shenzhen suffered losses
in 2000 accounting for 9.38% of the total loss-incurring listed companies in the country in
that year. Afterwards the number of loss-incurring enterprises in 2001 increases to 12
accounting for 11.88% of the total listed companies in the country. In addition according to
the statistics of Shenzhen Stock Exchange of the 9 loss-incurring local listed companies in
Shenzhen in 2000 6 of them undergo the system reform and are listed before 1993 and of the 12
loss-incurring local listed companies in Shenzhen in 2001 7 of them undergo the system reform
and are listed before 1993. In 2002 of the 67 A-share listed companies in Shenzhen there are
8 ST companies accounting for 13.43% of the total listed companies in Shenzhen. Of these ST
companies 5 of them undergo the system reform and are listed before 1993. The above cases show
that those leading enterprises which achieve rapid growth through the system reform or other
measures in Mainland China have encountered the sustained growth problems after a period of
rapid growth. In the middle and later stages in the 1990s referring to the U.S.A as the
example the Chinese enterprises carry out the Enterprise Reconstruction in extensive fields
and begin the practices of getting rid of the crisis and maintaining the sustained growth of
the enterprise. Through reconstruction a lot of enterprises have got rid of the crisis
improved their operation results and enabled the enterprises to grow again. The cause and mode
of the enterprise growth in the transitional economy the root cause of the crisis and the
measures to overcome the crisis as well as other enterprise management practices have
presented an inevitable research subject to the theoreticians. Meanwhile the issue concerning
whether enterprise reconstruction can be used as a new strategy to help enterprises to get rid
of the crisis and achieve sustained growth also arises.
