Hong Kong to benefit as China takes SOEs private

Hong Kong Ship - resized
By Rev Hui
03 Apr 2014

Citic Group’s decision to inject its main operating arm into a Hong Kong listed subsidiary has been interpreted by many as a sign that China is finally starting to reform and open up its underperforming SOEs. While the Chinese government has yet to announce anything concrete, market observers are already predicting that Hong Kong is first in line to benefit, write Clare Hammond and Rev Hui.

In the third plenum, held in November, China‘s central government made its first call for major steps to reform its 17,000 SOEs, many of which are lagging behind their private sector counterparts.

The efficiency gains of SOEs during the early 2000s have diminished and their average return ...

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