Nothing concentrates the mind like a deadline. Expected entry into the World Trade Organisation is producing a lot of last-minute thinking on the mainland, and a focus of the brainstorming is how to adjust to greater competition. One topic getting new attention is ownership of shares by the state.
In the financial sector, there are only two listed banks - Shenzhen Development Bank and Pudong Development Bank. The big banks may have to wait to sell shares to the public unless they create new entities that are not so heavily burdened with bad debts. But other banks, such as the Bank of Communications, Huaxia and Minsheng banks, are lining up support for a listing of their shares.
Another idea gaining currency is the sale of state shares to foreign partners. The company mentioned most frequently in such talk is colour-television manufacturer, Sichuan Changhong Electric.
Company officials have been dropping hints that they are negotiating with Philips of the Netherlands and Beijing appears to be encouraging the discussions.
In a recent interview with the Shanghai Securities News, Changhong's new general manager, Zhao Yong, described these talks as an 'open secret'.
Changhong, one of Beijing's favoured corporations, has been having problems more familiar to lesser state firms. Prices have been sliding under weak demand and keen competition, despite the formation of a cartel to prop up prices.
If Changhong teams up with Philips, it would have a real strategic partner that would be able to assist in a corporate overhaul.
