Publication Date



Many of China's large state owned enterprises (SOEs) are widely recognised as being inefficient, loss making and a major drain upon the country's resources. For the sustained progress of the country towards that of a market economy, further emphasis will need to be placed upon the reform of such enterprises. While steps have already been taken in this direction, such as the movement towards the corporatisation of such enterprises and the selling of shares in selected enterprises, a logical next step is to move in the direction of privatisation to further enhance their economic performance. The experiences of other transition economies could be relevant in identifying what are the major options and obstacles in this regard, and which, if any, possess most applicability in the context of China. The paper reviews the recent performance of China's SOEs, identifies the reforms which have already been implemented in this area, outlines the experiences of other transition economies in regard to the re-structuring of their SOEs, and places emphasis upon those options which are likely to be most applicable to the Chinese situation.