Advantages and disadvantages of the contracting system

1. Advantages of the contracting system:

(1) It enables enterprises to produce a new business mechanism with vitality;

(2) It promotes the separation of government and enterprises and lays the foundation for political reform;

(3) It promotes the formation and development of the market;

(4) It is conducive to the realization of a balance between the total supply of the whole society and the total demand;

(5) Realize the direct combination of material production conditions and workers.

2. Disadvantages of the contracting system:

(1) The contradiction between short-term behavior and long-term development;

(2) The contradiction between the company's interests and personal interests;

(3) The unfairness of a single indicator.

3. The contracting system, also known as the "contracted management responsibility system", is based on public ownership, with interest constraints as the mechanism, with responsibility as the core, the responsibility, power and body organically combined, defining the relationship between the two levels (the state and the enterprise) of the responsibility, power and profit, and realizing the separation of the two rights (ownership and management), to establish enterprise Commodity producers and operators of independent legal person status of the basic business system.