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Old stocks, new owners: Two cases of ownership change in China's stock market

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  • Stephen Green
  • Jenna Ho

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 organized 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 de-list them, it is also moving to create a competitive market in control.

Suggested Citation

  • Stephen Green & Jenna Ho, 2004. "Old stocks, new owners: Two cases of ownership change in China's stock market," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 2(3), pages 267-280.
    • Handle: RePEc:taf:jocebs:v:2:y:2004:i:3:p:267-280
    DOI: 10.1080/1476528042000276105
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    References listed on IDEAS

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    1. Jean-François Huchet & Xavier Richet, 2002. "Between Bureaucracy and Market: Chinese Industrial Groups in Search of New Forms of Corporate Governance," Post-Print hal-01331919, HAL.
    2. Jean-Francois Huchet & Xavier Richet, 2002. "Between Bureaucracy and Market: Chinese Industrial Groups in Search of New Forms of Corporate Governance," Post-Communist Economies, Taylor & Francis Journals, vol. 14(2), pages 169-201.
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    Cited by:

    1. He, Wei & Mukherjee, Tarun K. & Kent Baker, H., 2017. "The effect of the split share structure reform on working capital management of Chinese companies," Global Finance Journal, Elsevier, vol. 33(C), pages 27-37.

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    More about this item

    Keywords

    China; economic development; stock market; acquisition; restructuring; state-owned enterprises; privatization; JEL classifications: G18; H71; K22; L33; P31;
    All these keywords.

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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