Reforming China's construction state-owned enterprises

Reform of state-owned enterprises (SOEs) constitutes the central link of the entire restructuring of China's construction industry. The poor performance of SOEs was mainly attributed to the lack of autonomy and the vagueness in the delineation of property rights. Reform measures have been undertaken to address these issues, but the achievements are far from satisfactory. The paradox of increasing productivity and declining profitability calls for a sound plan to solve the SOE problem by considering both the root causes and symptoms. The relationship between the provision of sufficient, robust information and the performance of SOEs is analysed and, based upon this, the implications for further restructuring are assessed. The proposed solutions may be summarized as: creating a fair business environment for competition to enable each SOE's profit level to be used as a simple, low-cost and sufficiently informative indicator of managerial performance; transforming the traditional, centralized operation model so that the restructuring of SOEs as well as the whole construction industry can be realized.