How China's state-owned enterprises milk listed subsidiaries

Party, military and government interests override those of the shareholder

20200114 Communist Party China

China's government is more interested in protecting companies it has direct control over than in boosting profitability at their listed subsidiaries. (Nikkei Montage/Source photo by Reuters)

YUSHO CHO, Nikkei staff writer

SHANGHAI -- At last month's Marintec China, an annual maritime industry exhibition, scale models of destroyers, submarines and military supply vessels were displayed along with those of container vessels and bulk carriers.

The model warships were exhibited by Jiangnan Shipyard Group, which has its origins in the Self-Strengthening Movement, a national campaign to modernize (Westernize) economic, military and other institutions in the second half of the 19th century. The shipbuilder was founded in 1865 by such champions of the reform movement as Zeng Guofan and Li Hongzhang to build naval vessels for China, which at the time was threatened by Western colonial powers.

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