As mentioned above, the shares in hand of the state and the legal person are non-tradable. Owners of these shares usually come from the primary sponsors before Initial Public Offering (IPO). Worth mentioning, their processes of obtaining the shares are different. According to ‘Provisional Administration Ways for State-owned Shares in Stock Corporations’ (PAWSSSC), because there are different investment entities and equity management entities, state shares and state-owned legal person shares are collectively referred to as state-owned shares. Specifically, when government and relating departments invest or acquire stock corporations, their shares are clarified as state shares. When state-owned legal persons and government affiliated institutions
…show more content…
This is regarded as unique compared to other countries. The phenomenon that one shareholder being overwhelming big or highly concentrated is not so common and typical in the UK or USA where there are mainly market-based. In some European countries, like Finland and Sweden, as well as Latin America, South East Asia and Africa, it is quite typical that many firms are in the controlled of the families (WEI, 2007). Even with influence by English common law, ‘guanxi’ referring a personal networking system is a vital factor in the Hong Kong market where informal relationships are common rather than formal written contracts’ (Jaggi, Leung and Gul, 2009). As a result, ownership concentrated in families in firms is common or might be dominant in Hong Kong. According to The Economist (2014) Hong Kong ranked first in the Global crony-capitalism index. In the bank-based market, like the German and Japanese, most of the main and big firms are controlled by the major commercial banks. The level of government shareholding is found to be significantly below family shareholding in the ‘stock- market-driven’ economies, ‘crony capitalistic’ economies or ‘bank-driven’ economies (Faccio, Lang and Young, 2001). While in China where there is the so-called socialist market economy, nominally the market serves the interest of the people as a whole. But in fact priority is still the interests of the state. It is essential that the stock markets reforms need fund restructuring of the state-owned enterprises (SOEs) in the Chinese stock market. Unavoidably, most of the listed companies in China are state-owned and most of the firms have high shares concentration. According to the data released by the State Council of China, by the end of 2012 the amount and market value of the state-owned firms in A-share are 953 and 13710 billion, the
This is regarded as unique compared to other countries. The phenomenon that one shareholder being overwhelming big or highly concentrated is not so common and typical in the UK or USA where there are mainly market-based. In some European countries, like Finland and Sweden, as well as Latin America, South East Asia and Africa, it is quite typical that many firms are in the controlled of the families (WEI, 2007). Even with influence by English common law, ‘guanxi’ referring a personal networking system is a vital factor in the Hong Kong market where informal relationships are common rather than formal written contracts’ (Jaggi, Leung and Gul, 2009). As a result, ownership concentrated in families in firms is common or might be dominant in Hong Kong. According to The Economist (2014) Hong Kong ranked first in the Global crony-capitalism index. In the bank-based market, like the German and Japanese, most of the main and big firms are controlled by the major commercial banks. The level of government shareholding is found to be significantly below family shareholding in the ‘stock- market-driven’ economies, ‘crony capitalistic’ economies or ‘bank-driven’ economies (Faccio, Lang and Young, 2001). While in China where there is the so-called socialist market economy, nominally the market serves the interest of the people as a whole. But in fact priority is still the interests of the state. It is essential that the stock markets reforms need fund restructuring of the state-owned enterprises (SOEs) in the Chinese stock market. Unavoidably, most of the listed companies in China are state-owned and most of the firms have high shares concentration. According to the data released by the State Council of China, by the end of 2012 the amount and market value of the state-owned firms in A-share are 953 and 13710 billion, the