Economic Observer Online
May 29, 2012
By Kang Yi（康怡）, Wang Tengxiang （王騰翔）
Translated by Tang Xiangyang
Original article: [Chinese]

The State-owned Asset Supervision and Administration Commission (SASAC) last week issued Guidelines for Attracting Private Capital in the Restructuring of State-owned Enterprises, stating the private and state investors will get equal treatment.

The guidelines say that, during the restructuring of state-owned companies, private investors may buy shares or convertible debt in those firms. As well as cash, they may also make investments with equipment, land and intellectual property.

The guidelines prohibit state-owned enterprises from setting any conditions for private investors that aren’t also applied to their state-owned counterparts.


Previously, although state-owned enterprises were required to treat private investors equally, they still attached special conditions.

The guidelines are to break the “glass door” that has blocked private investors from investing in state-controlled enterprises or industries.

Since private investors are always too small to invest in state-owned giants or industries such as oil, electricity grids, railway and communications, the guidelines allow private investors to co-establish equity investment funds with their state-owned counterparts. They may also cooperate in investing abroad.