This academic year I am living in China conducting research and assisting with the China-based programs of my employer, the University of Maryland’s Robert H. Smith School of Business. Last weekend, just before the Chinese New Year, we held commencement exercises for our second Beijing-based class of executive MBA students. A story about the graduation exercises is here and a few photos are here.
China’s State-owned Assets Supervision and Administration Commission (SASAC), Chaired by Li Rongrong, has promulgated a new regulation regarding share ownership by executives of state-owned enterprises undergoing reform. The new rules permit management to own shares but avoid privatization (and management buy-outs) by restricting that ownership, explicitly prohibiting management from becoming the dominant shareholder.
The regulations are blandly and vaguely titled something like “Implementing Opinion Concerning Further Standardization of the Work of State-owned Enterprise Reform (in Chinese, 关于进一步规范国有企业改制工作的实施意见 or Guanyu jinyibu guifan guoyou qiye gaizhi gongzuo de shishi yijian). The full text of the SASAC Implementing Opinion is available in Chinese here.
This Implementing Opinion was adopted by the State Council more than a month ago, on December 19, 2005. However, as pictured, a headline about the “new” rules dominates Xinhua’s website today. That headline links to this story about the Implementing Opinion.
Comments on the rules by a SASAC spokesperson are reported here.
SASAC is under the State Council (the rubric under which nearly all of the PRC’s vast collection of government agencies is put, currently headed by Premier Wen Jiabao). In Chinese SASAC is abbreviated as 国务院国资委 (Guowuyuan guo zi wei). The SASAC English web site is here.
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Update:
The English-language China Daily has a story about the new rules here.
This deeply misguided article on the People’s Daily English website (and attributed as “Source: Xinhua”) blares in a headline that “Management buyout (MBO) permitted in major China SOEs ,” but then it goes on to note:
Total shares held by the managerial staff should be less than the volume that could absolutely or relatively control the SOEs, according to a document issued by the State-owned Assets Supervision and Administration Commission (SASAC) and approved by the State Council.
MBOs can only exist if control changes hand; that’s the buy-out or BO part of MBO. Otherwise, the transaction is at most a management buy-in (an MBI?). Good reminder of the hazards of translation.
I just returned from teaching a class in Hong Kong and am pleased to learn that with the backing of the Carnegie Endowment the Hong Kong Journal has been launched.
The “About” page describes the journal as follows:
The Hong Kong Journal is a quarterly, online publication designed to provide thoughtful writing about political, economic and social issues relating to Hong Kong and its neighborhood. Foundation-financed, it is hosted by the Carnegie Endowment for International Peace in Washington, DC, and is freely available to anyone anywhere who has access to the Internet.
The journal has no political agenda or ideological mission; its goal is to publish original articles that analyze and explain important trends affecting Hong Kong, and to make them available to all those interested in developments there-including those who might influence national policies. The Hong Kong Journal welcomes opinion though not polemics, and does not seek unity of viewpoints. It welcomes contributions from a broad and diverse group of authors from the United States, Hong Kong, China and elsewhere. The goal is to have occasional contributions from many experts rather than many articles from a few.
The editor is Robert Keatley, a journalist who now resides in Washington and has lived three times in Hong Kong. During a long career with The Wall Street Journal, his assignments included serving as Asian bureau chief, diplomatic correspondent, foreign editor, editor of The Asian Wall Street Journal and editor of The Wall Street Journal Europe. More recently, he was editor of the South China Morning Post, Hong Kong’s leading English-language newspaper. In late 2005, he taught at the journalism department of Tsinghua University in Beijing.
New rules on stock option incentive programs have been enacted in China. The Administrative Measures for Stock Option Incentives (Provisional) were promulgated by the China Securities Regulatory Commission (CSRC) on the last day of 2005 and became effective Jan. 1, 2006. Listed companies that have already undergone reform of their non-tradeable shares can create stock incentive programs based on these regulations.
The Chinese name is 《上市公司股权激励管理办法》（试行） Shangshi gongsi guquan jili guanli banfa (shixing) and the full text is availale here.
Xinhua puts together its list here.