Corporate governance and state-owned shares in China listed companies

摘要

During the last decade, China public listed companies' (PLCs) performance is growing weakly and governance practices are seriously defective. Some of the previous studies based on practice of developed economies overlooked the underlying issues, and the empirical researches are mixed. This paper argue that, from the beginning of the reform of restructuring China state-owned enterprises (SOEs) into PLC s, the concern about the potential loss of state assets made the ownership split into three different type of shares, with only a small fraction of A-shares are tradable, and the state keeps on holding the controlling share stakes. This special institutional arrangement rooted deeply in China political system and ideology, as well as in the economic reform strategy, explains large part of the inefficiency of corporate governance of China PLCs. After an unsuccessful policy practice in 2001, in which the government's objective aiming to finance its huge social security fund gap conflicted with that of market, it should be realized that there are two major unknowns: the time and the pricing mechanism of the state shares to be reduced, which are crucial to the future of China capital market and economic development.