China has identified six large state-owned enterprises (SOEs) for a pilot programme to attract private investment and improve corporate governance, as the government pushes ahead with reforms aimed at raising economic efficiency.
In a landmark blueprint for economic reform announced late last year, the ruling Communist party promised to push “mixed ownership” reform, a phrase understood to mean partial privatisation, while maintaining SOEs as the backbone of the economy.
Since the financial crisis, the productivity gap between state-owned and private companies has widened, with average return on assets for state entities at around 4.6 per cent, compared with 9.1 per cent for private groups, according to estimates by GaveKal Dragonomics, a Beijing-based research house.