Conflicting signals

5 August 2016 By Rachel Morarjee

Consolidation is picking up amongst state-owned enterprises. Executives running enlarged companies have to meet a plethora of contradictory goals to keep their Communist Party bosses sweet. The confusion means China’s state-run giants could end up pleasing no one.

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China's State Council issued new guidelines on the restructuring and reorganization of state-owned enterprises (SOE) on July 26.

"SOEs' restructuring and reorganization should serve national strategies, respect market rules, combine with reforms, follow laws and regulations, and stick to a coordinated approach," the guidelines said.

Newly merged entities will have "a more logical general structure, and significantly improved efficiency in capital allocation," allowing them to play a greater global role, the State Council added.

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