NEW RULES TO STRENGTHEN SOEs
November 10, 2008 | BY
clpstaff &clp articles &Government measures promote better protection and management of state-owned assets
The government has passed rules issuing regulations with the purpose of protecting state-owned assets. The rules will strengthen state-owned enterprises through relevant specific provisions which are designed to help to reduce the level of administrative interference for state-owned enterprises.
The Law of State-Owned Asset of Enterprises, passed by the National People's Congress and will take effect in May next year, specifies the functions of the State-Owned Asset Supervision and Administration Commission.
According to Article 34, for wholly state-owned enterprises or wholly state-owned companies, or companies with a majority held by state assets, their merger, separation, dissolution, bankruptcy and other important matters need to be approved by the government of the same level as provided in the laws.
But the law does not clearly promote and encourage social investment in state-owned enterprises, says Sun Hui, partner at Run Ming Law Office.
“The law provides only that enterprises shall be decided according to the provision of the State Council. Foreign and local investors may hesitate without knowing how these enterprises are defined and the interpretation of 'other matters' is,” Sun said.
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