After the economic reformation, the Chinese companies which has been operated inefficiently by the country and the government, has been reformed with the government-owned companies, collectively-owned companies, local companies, private-companies and joint-venture companies in new possession form. Therefore, the Chinese economy was met the chance of rapid growth. But the government-owned companies still remains as the dominant type of the whole ownership structure. However, this has become not only the biggest hurdle in economic reformation as it has failed to obtain a remarkable achievement, but it also generates problems from various aspects including social aspects. This study focuses on reviewing the reformation process of government-owned companies that has been executed since the gradual pursuit of the Chinese economic reformation and opening policy from 1978, and it offers prospects for the development of Chinese government-owned companies as well as their current problems. China could gain a certain level of effect along with the rapid development of reform of government-owned companies; however, since China failed to solve the fundamental problems, it had to face a vicious circle that new reformation generates problems requiring another reformation owing to the side-effects and limitations of the previous reformation. It is necessary for the current government-owned companies to solve step by step serious problems including the separation of government from companies, establishment of a governmentowned asset management system, self-responsibility for the reformation and gain/loss of the reformation of corporate property rights, surplus human resources of companies, excessive departments, separation of companies from society, and the social welfare system. Also, China deals with insolvent companies actively through the sale of government-owned company assets and the bankruptcy system, enhances the ability to attract funds through IPOs, privatizes the subject of business operations or partly corporate ownership, achieves economies of scale of government-owned companies through mergers and acquisitions of government-owned companies along with the introduction of a stock company system, and attracts equity capital through the issue of shares, which is estimated to be a very important opportunity for Korean companies planning to penetrate into China, in terms of the offering of new opportunities.