Two of China’s largest state-owned companies have announced plans for partial privatisation, indicating their intention to seek private capital without substantially relinquishing control over corporate strategy.
China’s Communist party wants to improve the performance of the country’s state-owned enterprises, where returns on assets trail far behind those of privately owned groups. Economists say that raising efficiency in the state sector is crucial to supporting overall growth and defusing financial risks from SOE debt.
“Mixed-ownership reform” — a euphemism for partial privatisation — will be a critical pillar of SOE reform efforts in 2017, according to a statement by top Communist party leaders at their annual economic planning meeting in mid-December. The statement named electricity, petroleum, natural gas, railways, civil aviation, telecommunications and defence as the focus of mixed-ownership reforms.