Breaking New Ground in State-owned Assets Transfers

February 29, 2004 | BY

clpstaff &clp articles

Administration of the Assignment of Enterprise State-owned Assets and Equity Tentative Procedures mark another legal step in China's effort to reform the state sector of the economy.

By Jean-Marc Deschandol Partner Norton Rose, Beijing

China's state-owned enterprise (SOEs) reform programme has entered a new and accelerated phase marked by a flurry of new regulations.1 The PRC central government has recently emphasized that there is a compelling need to quickly reshape the enormous state sector to address the non-performing loans problem at its primary source.

In November 2003, the SASAC issued the Rationalization of the Reorganization of State-owned Enterprises Several Opinions (the Opinions),2 which paved the way for the issuance of the Tentative Procedures. The Opinions stress the urgency of increasing transparency in SOE sale transactions and acceleration and facilitation of the sale of state assets to either domestic or foreign private interests.3 The Opinions envision that the state will ultimately only retain an interest in a few industries and that SOEs will be subject to sweeping reorganization and sale.

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