The 14th National Congress of the CCP set the objective of building a “socialist market economy”, providing political authorization for deeper enterprise reforms—including corporatization and new governance structures for state firms.
A constitutional amendment formally incorporated the concept of the socialist market economy, reinforcing the legal-political foundation for transforming SOEs into market-oriented corporate entities.
The 3rd Plenum of the 14th CCP Central Committee adopted a landmark decision calling for SOEs to establish a modern enterprise system (clear property rights, defined responsibilities, separation of government and enterprise, and scientific management), a key blueprint for corporatization.
China’s Company Law was adopted, establishing the core corporate forms (limited liability and joint stock companies) that SOEs increasingly used in restructuring and corporatization efforts.
With the Company Law in force, SOE restructuring could proceed with clearer statutory backing for shareholding structures, boards, and other corporate-governance mechanisms used in corporatization.
China adopted the Labour Law, which became a key framework for labor relations as SOE reform intensified and employment systems shifted away from cradle-to-grave guarantees toward more contract-based arrangements.
Around the late 1990s, policy emphasized retaining and corporatizing large SOEs in strategic sectors while restructuring, closing, or privatizing many smaller SOEs—an approach strongly associated with the post-1997 reform push and mass “xiagang” layoffs.
After becoming premier in 1998, Zhu Rongji advanced a three-year effort to help large and medium SOEs resolve losses and improve governance/efficiency—an important phase in pushing corporatization and consolidation.
The State-owned Assets Supervision and Administration Commission (SASAC) was formed as part of State Council restructuring to clarify the state’s investor role and strengthen centralized oversight of major non-financial central SOEs.
The State Council issued interim regulations on supervising and managing state-owned assets in enterprises, supporting the new state-asset management architecture and emphasizing separation of public administration from investor functions.
China launched split-share structure reform to address the division between tradable shares and large blocks of non-tradable state/legal-person shares—an important step for SOE corporatization via capital markets and improved shareholder alignment.
China adopted the Law on State-Owned Assets in Enterprises, strengthening the legal framework for state-asset ownership rights, governance, manager selection/appraisal, and oversight—further institutionalizing corporatized state ownership structures.
The State-Owned Assets in Enterprises Law took effect, marking a major legal consolidation of the post-2003 state-asset supervision system and clarifying roles of institutions (including SASAC) acting as the state’s capital contributor.
State-Owned Enterprise Reform and Corporatization (1992–2010)
