Technology firm Founder applied to the government last year to sell 35 per cent of its shares to staff as a reward for turning a laboratory start-up at Beijing University into a six billion yuan (HK$5.6 million) enterprise. The application has been sitting in a file in the company division of the Ministry of Finance ever since. Officials are arguing over who the company really belongs to - the government, the managers, the employees, or someone else. Similar debates have been going on since August 1988, when the government set up the State Assets Management Bureau to safeguard the interests of the state in the sale of public assets. 'It is hard to say what the ministry will decide,' said a Founder official. 'These are complicated issues.' The government was unhappy with the performance of the State Assets Management Bureau and abolished it in 1998, handing its powers to the Ministry of Finance's company division. But the situation has not improved. President Jiang Zemin announced a further change in his speech to the party's 16th congress on November 8, dividing the responsibility between central and local governments. 'The state will make laws and regulations and set up a state asset management system under which the central and local governments carry out the responsibilities of the investor on behalf of the state,' he said. 'The central government will represent the state as investor in large state-owned enterprises, infrastructure and important natural resources. Local governments will represent the state as investor in other state assets.' He added that both central and local governments needed to establish state asset-management organisations. One Chinese economist said the central and local governments had been fighting for the past 10 years over control of such assets. 'Jiang's speech will make things clearer. It will give the central government control over the 15,000 most important state firms out of the total 37,000,' the economist said. Figures show the value of state assets at the end of last year was 10.9 trillion yuan, of which 3.6 trillion yuan was tied up in non-profit-making enterprises. The debate centres on how to maximise the efficiency of these assets - including measures like turning them into stock-holding firms, joint ventures or holding companies - management buyouts and privatisation, while protecting the economic interests of the state. 'The issue is how to manage this change in an efficient way, ensure the new firms are going concerns and yet protect the interests of the state at the same time. It is a complicated issue involving many interests,' said a Western economist.