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Question

Difficulty: MediumPublic Corporations: Organization, Commercialization, Privatization, and Control

Unlike privatization, which transfers government shareholding of public enterprises to private investors, commercialization reorganizes state-owned corporations to operate on a profit-making basis while retaining full government ownership.

Answer: Answer

Answer

The statement is true because commercialization reform focuses on managerial autonomy and profit orientation while keeping ownership in state hands, whereas privatization involves transferring state equity to private entities.
The statement accurately reflects the fundamental distinction between commercialization and privatization in public enterprise reform. Commercialization aims to eliminate financial waste and instill profit motivation while keeping the enterprise in public hands, whereas privatization transfers ownership rights and equity to the private sector.

Step-by-Step Solution

1
Analyze the definition and purpose of commercialization in public corporations.
Commercialization refers to restructuring a public enterprise so it operates efficiently like a commercial business, charging market-reflective rates to cover operating costs, while the government retains ownership.
Understanding the structural nature of commercialization clarifies whether government ownership is lost.
2
Analyze the definition of privatization in contrast to commercialization.
Privatization explicitly involves the sale or transfer of government-owned assets and shares to private investors.
Distinguishing ownership transfer from managerial restructuring isolates the core difference between the two policies.
3
Evaluate the truth value of the stem statement.
Since commercialization retains state ownership and privatization relinquishes state ownership, the comparative statement is accurate.
The statement correctly contrasts ownership retention under commercialization with equity divestment under privatization.

Key Concept

Operational and Ownership Differences Between Commercialization and Privatization
Estimated Time:1m 0s
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Topics

Public Corporations: Organization, Commercialization, Privatization, and Control

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