Making Ownership Matter: Prospects for China's Mixed-Ownership Economy

Marshall W. Meyer, Tsai Wan-Tsai Professor, Professor of Management and Sociology, The Wharton School, University of Pennsylvania
| Fisher-Bennett 345, CSCC conference room

At the Third Plenum of the 18th Chinese Communist Party (CCP) Central Committee in November 2013, China’s leaders strongly endorsed the concept of a mixed ownership economy, which the Plenum’s sixty point Decision document defined as "cross holding by, and mutual fusion between, state-owned capital, collective capital, and non-public capital.” In essence, China’s leaders hope that mixed ownership can augment the role of state-owned capital by “maintaining and increasing its value and raising competitiveness.” This paper reaches different conclusion. The analysis of Chinese data suggests that mixed ownership—the joining of non-state and state assets—may yield disappointing results and may not align with top leaders’ articulated objectives. That is because ownership and control do not always correspond in China. And this, in turn, means that the effects of ownership reform may be limited unless the state is willing to cede substantial control of mixed ownership enterprises to private investors.

Time permitting, we will also discuss experiments in decentralized administration, operation, and ownership undertaken by Chinese firms. These experiments are more widespread than generally appreciated and bear on the larger issue of where ownership and control should lie in the Chinese economy, not just whether ownership and control should lie with state or private interests.

English paper URL: http://www.paulsoninstitute.org/media/143761/ppm_making_ownership_matter...

Chinese paper URL: http://www.paulsoninstitute.org/media/143764/ppm_making_ownership_matter...

Open to all, lunch provided.