How to rig a state sale

Author: | Published: 1 Nov 2007

A hot topic in China is the so-called diversification of capital of state-owned enterprises (SOEs). This is nothing more than a politically correct euphemism for privatisation. It essentially means that the Chinese government is looking to put for sale signs on state-owned enterprises (SOEs) all across China.

The State-owned Assets Supervision and Administration Commission (SASAC) was established in 2003 to act as the direct owner and administrator of SOEs across China. At the time it was set up, central SASAC was responsible for nearly 200 large-scale central-level SOEs. According to recently announced plans, SASAC intends to cut that number to fewer than 100 central-level SOEs and to require all remaining central-level SOEs to spin off all non-core assets. Each of the central-level SOEs has hundreds and sometimes thousands of direct and indirect subsidiaries, and below the central level, at the provincial and municipal levels, there are tens of thousands of...