The law on state-owned assets of enterprises

Managing state assets effectively is important. It is particularly so in China because of the planned economic system which favours state ownership. Economic reform has led to a large number of state-owned enterprises being converted to corporatised enterprises. In order to efficiently manage the huge amount of state assets in these enterprises, a state assets management system (SAMS) was established in 2003. However, management of state assets was not problem-free: many government officials, company directors and managers have been prosecuted for corruption in connection with stealing and illegally transferring state assets. People, therefore, started to question the state supervision system and this has resulted in a new regulatory process set out in the PRC Law on State-owned Assets of Enterprises (中华人民共和国企业国有资产法) – the SOAE Law – promulgated by the Standing Committee of the National People's Congress on October 28 2008. It became effective on May 1 2009.

The SOAE Law has nine chapters and 76 articles; only the most important provisions are dealt with here. These include: the kinds of state assets governed by the SOAE Law; the state assets investors; the rights and responsibilities as state assets investors of the State-owned Assets Supervision and Administration Committee of the State Council (Sasac) and State Assets Management Bureaus (SAMBs); and whether the SOAE Law is a cure for all the past problems in state assets management ......

This is a preview of a feature article written by Cheng Wei-qi of the Law School of City University of Hong Kong which will appear in the November issue of CLP magazine. It will be available online next week.