Shanghai Electric Group became the latest Chinese company to answer the call for reform of inefficient state-owned enterprises as it announced a restructuring that would see it acquire assets from its state parent.
The company, one of China’s largest electrical equipment producers, will transfer the assets from its unlisted parent into its listed subsidiary — a proposal that matches last year’s restructuring at Citic Group, one of China’s largest SOEs. Despite being listed in Hong Kong and Shanghai, Shanghai Electric is 63 per cent state owned.
If it followed the Citic example, China’s government would maintain majority control of the restructured company — further evidence that privatisation will not form a major part of the programme to reform SOEs launched by the Communist Party in 2013.