China’s Privatization Binge

Many people understandably are skeptical of China’s privatization efforts, but this tidbit from The China Daily’s business section (August 25, 2010) is worth highlighting:

LI Rangroong, “who has been the minister since SASAC’s [the State-owned Assets Supervison and Administration Commmission] establishment in 2003, has led the restructuring and reform of central state-owned enterprises, the number of which has been cut to 123 to 196.”

That’s a 37.2 percent reduction in just seven years. Further, for context,

“SASAC is a powerful agency that is in charge of 123 State-owned enterpirese, which range from Petro-China, China’s top oil and gas producer, to China Mobile, the world’s biggest mobile carrier.”

LI Rongrong was recently replaced by WANG Yang, China’s chief of government’s quality inspection bureau.

The key point here is the trajectory of change and reform. While the government still controls the “commanding heights” of the economy, policymakers have been aggressively divesting central and provincial governments of many, many businesses. Some are complete divestitures, but many more are sales of large stakes of government shares of wholey owned state enterprises to private equity investors.

(Sorry, I’m in China right now and had trouble tracking down the linke on the web site.)