The emergence of China’s mixed ownership enterprises and their corporate governance

Abstract

Over the last three decades of the Chinese economic reform with a focus on the state-owned enterprises (SOEs) restructuring, one striking phenomenon is the rise of the mixed ownership enterprises (MOEs) in China. The objective of this thesis is to analyse the factors that can explain the emergence and the rise of the MOEs, to explore the corporate governance of the MOEs, and to assess the performance of the MOEs. The research finds that the unique experiments and practices of China’s SOEs reform in the past 30 years have formed the China Model of SOEs reform, China’s mixed ownership has its roots in the China Model. One major explanation to the rise of the MOEs is the synergy effect gained from the combination of the different advantages of both the private enterprises and the state enterprises. The private enterprises have better operational mechanisms and the state enterprises have better access to business resources and political support. The thesis has looked at 5 issues of the institutional arrangements of MOE’s corporate governance, named as the SCORE. It is found that the largest shareholder in most of the MOEs is still the state, but the control structure is not always corresponding to the shareholding structure, and the governmental intervention in the business of the MOEs has been reduced although the reduction is limited. The thesis shows that there is no noted relationship between corporate performance and mixed ownership, but the transfer of corporate controlling powers is very important for the ownership-transformed companies from whole ownership to mixed ownership to improve the performance. On this basis, the thesis argues that China needs to push forward the further commercialization of the corporate governance of the MOEs in the future