China's state-owned enterprise reform | Capital Group Canada | Insights

Insights

VIDEOS  |  MAY 2019

China's state-owned enterprise reform

Susan Dietz-Henderson, Capital's China affairs director, discusses the progress of China's plan to open up certain government sector enterprises to private and mixed ownership.

 

Susan Dietz-Henderson: One of the key reforms that was talked about when Xi Jinping first came into power was state-owned enterprise reform. From the outside observer’s point of view, there was a lot of hope in this reform that it meant that state-owned enterprises were going to undergo a wholesale privatization and that they were going to be encouraged to behave like genuinely independent entrepreneurial corporations.

I think the commentators were probably jumping the gun a little there. State-owned enterprise from the communist party’s point of view means making the state sector much more competitive and much more efficient, but they have also been careful to categorize the various elements of the state sector into: strategic and never-to-be privatized; semi-strategic-important, and can be privatized to a certain extent, which is where the mixed ownership reform will come into play; and then there are those other state-owned enterprises which can be privatized, pulled apart, merged, a much more flexible policy at that lower level of the state sector.

One of the key reforms relating to state-owned enterprise is mixed ownership, and that’s enabling private players to be able to participate in the ownership and the decision making of the enterprise. It’s been slower in progressing than people had hoped, but it is one of key aspects of state-owned enterprise reformers Xi Jinping is very interested in.

 

 

Susan Dietz-Henderson Equity investment analyst

Susan Dietz-Henderson is the china affairs director at Capital Group. She has 31 years of diplomatic experience and has been with Capital Group for 11 years. Prior to joining Capital, Susan was the Australian Consul-General in Shanghai, an assistant secretary for the Australian Department of Foreign Affairs and Trade in Canberra, and had other diplomatic postings in China, the United States, Australia, and Papua New Guinea. She holds a diploma in applied economics from the University of Canberra, a bachelor’s degree in arts and Asian studies from Australian National University, and a diploma in applied linguistics and translation from Wycliffe College. Susan is based in Beijing.


Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

Unless otherwise indicated, the investment professionals featured do not manage Capital Group‘s Canadian mutual funds.

References to particular companies or securities, if any, are included for informational or illustrative purposes only and should not be considered as an endorsement by Capital Group. Views expressed regarding a particular company, security, industry or market sector should not be considered an indication of trading intent of any investment funds or current holdings of any investment funds. These views should not be considered as investment advice nor should they be considered a recommendation to buy or sell.

Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and not be comprehensive or to provide advice. For informational purposes only; not intended to provide tax, legal or financial advice. We assume no liability for any inaccurate, delayed or incomplete information, nor for any actions taken in reliance thereon. The information contained herein has been supplied without verification by us and may be subject to change. Capital Group funds are available in Canada through registered dealers. For more information, please consult your financial and tax advisors for your individual situation.

Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made herein. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements.

The S&P 500 Composite Index (“Index”) is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Capital Group. Copyright © 2019 S&P Dow Jones Indices LLC, a division of S&P Global, and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC.

Bloomberg® is a trademark of Bloomberg Finance L.P. (collectively with its affiliates, "Bloomberg"). Barclays® is a trademark of Barclays Bank Plc (collectively with its affiliates, "Barclays"), used under licence. Neither Bloomberg nor Barclays approves or endorses this material, guarantees the accuracy or completeness of any information herein and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.

MSCI does not approve, review or produce reports published on this site, makes no express or implied warranties or representations and is not liable whatsoever for any data represented. You may not redistribute MSCI data or use it as a basis for other indices or investment products.

Capital believes the software and information from FactSet to be reliable. However, Capital cannot be responsible for inaccuracies, incomplete information or updating of the information furnished by FactSet. The information provided in this report is meant to give you an approximate account of the fund/manager's characteristics for the specified date. This information is not indicative of future Capital investment decisions and is not used as part of our investment decision-making process.

Indices are unmanaged and cannot be invested in directly. Returns represent past performance, are not a guarantee of future performance, and are not indicative of any specific investment.

All Capital Group trademarks are owned by The Capital Group Companies, Inc. or an affiliated company in Canada, the U.S. and other countries. All other company names mentioned are the property of their respective companies.

Capital Group funds and Capital International Asset Management (Canada), Inc. are part of Capital Group, a global investment management firm originating in Los Angeles, California in 1931. The Capital Group companies manage equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.

The Capital Group funds offered on this website are available only to Canadian residents.


Related Insights