A Nationwide Survey of Privatized Firms in China

Yan Guo ; Jie Gan ; Chenggang Xu

Associate Professor, Peking University, China guoyan@pku.edu.cn
Hong Kong University of Science and Technology (HKUST) jgan@ust.hk
Professor, Department of Economics, London School of Economics and HKUST, Tel: +852-2358-7601 cgxu@ust.hk

JEL Classification: P26, P31, G32, G38

Abstract

This descriptive study is based on a nationwide survey of privatization in China. Between 1995 and 2005, close to 100,000 firms with 11.4 trillion RMB in assets were privatized in China. This privatization process encompassed two-thirds of state-owned enterprises and state assets. Privatization in China has created concentrated private ownership and greatly changed corporate governance. After privatization, the state has withdrawn from firms’ daily decision making. Soft budget constraints have been substantially hardened. Firms have become more efficient and more profitable.

Keywords:

Privatization, Corporate finance, Corporate governance, Economic reform, Chinese economy

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