Wednesday, February 25, 2009

Central SOEs: Score One for Transparency!

Securities Daily reports (from Econ. Observer Online) that, beginning with 2009, China's Central State-Owned Enterprises (SOEs) will publicize their annual reports. This is big news!

Until now, central SOE results have been reported in aggregate, but the only enterprise level numbers we could see were those we could glean from the annual reports of the listed entities owned by SOEs. Now we will apparently be able to see the annual reports of all 141 group companies owned by central SASAC.

One unanswered question: who will audit these rat's nests of confusing cross-shareholdings, and how reliable will the numbers be?


  1. My guess is that there will be public and private versions of the reports, much like the public and private versions of news reports provided to the public and to the Party, respectively. Then there's the whole issue of two sets of books...

  2. Thanks for the comments!

    You're right in that full and complete transparency is probably too much to hope for. Then again, we occasionally hear of US companies with audited financial statements hiding massive fraud from their auditors. (And I wonder how many we don't hear about!)

    On the plus side, maybe this is also a recognition that China's people deserve to know how state resources are being spent -- even if the state may not be ready to reveal everything yet.

    It also gives economists more numbers with which to run regressions. :)


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