Abstract
AbstractThe Chinese government attempted to industrialize the country in a short time by transforming traditional state-owned enterprises (SOEs) into modern joint-stock companies in the form of business groups, modeled after Korean chaebols. The government initially formed loose informal arrangements among companies, but quickly realized that more formal, equity-based arrangements were necessary for sharing resources among various companies. Various measures such as spin-offs, mergers, and acquisitions of shares, were used to create business groups. The state-holding companies were supervised by the State Property Management Committee to maintain control of state property. Despite a series of reforms, many business groups in China have been losing money. Their viability in China is now being heatedly debated.
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