Abstract: Starting from the financial allowance to the state-owned enterprises,this paper analyzes the problems existing in their management,regarding that the mixed functions of the government and enterprises is the major problem and it leads to various wrong relationships and wrong management.Suggestions are given from the perspectives of government management and enterprise management to study the structure of the state-owned enterprises and set up modern enterprise systems in China.

Key words: the state-owned enterprises, the mixed functions of the government and enterprises, government management, enterprise management