Privatization in China: Experiences and Lessons

Abstract

This chapter provides a descriptive analysis of Chinas privatization, by far the largest one in human history. Unlike the mass privatization in other transitional economies, China has adopted multiple approaches to privatizing its state-owned enterprises (SOEs). These approaches included share issue privatization (SIP), joint ventures with foreign firms, management buy-outs (MBO), and sales to outsiders. I examine how these different approaches may affect the incentive and ability of the new owners to restructure the firms and thus influence the outcomes of privatization programs.