Singapore’s Temasek Model and State Asset Management in China

Abstract

Since the late 1970s, Singapore has been an important policy reference for China. Some Chinese policymakers viewed Temasek, its government holding company, as a model for state asset management. They studied Singapore’s approach, but ultimately chose a different institutional design when establishing the State-Owned Assets Supervision and Administration Commission (SASAC) in 2003. China’s engagement with Temasek subsequently concentrated on corporate governance, specifically boards of directors in state-owned enterprises (SOEs). Yet despite the Temasek model’s appeal, its influence in China was limited by the far greater size and indebtedness of the state sector; the weaker role of firm performance in asset and capital allocation; SOEs’ numerous social and welfare functions; lack of willingness to augment firm autonomy; and divergent interpretations of the Temasek model and its reference value. “Policy collage” by Chinese policymakers explains the existence of formal similarities between China and advanced capitalist economies without fundamental convergence in function.