Old Stocks, New Owners: Two Cases of Ownership Change in China's Stock Market

Journal of Chinese Economic and Business Studies, Forthcoming

30 Pages Posted: 19 Feb 2004

See all articles by Stephen Paul Green

Stephen Paul Green

Standard Chartered Bank (Hong Kong) Limited

Jenna Ho

Royal Institute of International Affairs

Abstract

During the 1990s, ownership of China's listed firms remained stable: state entities remained in control of restructured state-owned enterprises since only a minority of shares were allowed to trade publicly and to be owned privately. However, since 1999 the ownership of China's listed firms has become more fluid due to the development of an off-exchange market in 'legal person' shares. This paper examines two such cases of ownership change. The case of Taitai's take-over of Lizhu shows that transfer of control is now occurring on a commercial basis. However, the Baiwen case shows that buy-outs are still being organised by government entities to support failing state firms. The deals suggest that while the government is using all means to restructure listed firms, rather than delist them, it is also moving to create a competitive market in control.

Keywords: China, Economic Development, Stock Market, Acquisition, Restructuring, State-owned enterprises, Privatisation

JEL Classification: G15, G18, G34, H71, K22, L33, P31

Suggested Citation

Green, Stephen Paul and Ho, Jenna, Old Stocks, New Owners: Two Cases of Ownership Change in China's Stock Market. Journal of Chinese Economic and Business Studies, Forthcoming, Available at SSRN: https://ssrn.com/abstract=504042

Stephen Paul Green (Contact Author)

Standard Chartered Bank (Hong Kong) Limited ( email )

Hong Kong
China

Jenna Ho

Royal Institute of International Affairs ( email )

Chatham House
St. James's Square 10
SW1Y 4LE London
United Kingdom

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