State Ownership of Chinese Companies and China Company Shareholding Structure Investigation

state owned enterprise

Table of Contents

Due to China’s special national conditions and social system, state-owned enterprises are a unique type of enterprises in China. So how to tell whether a company is a state-owned enterprise or not? You will find the answer in this article.

state own enterprise

How to Define A State-owned Enterprise?

At present, China’s laws, regulations and normative documents do not have a clear unified definition of state-owned enterprises. In simple terms, the capital of the enterprise is wholly or mainly funded by the state, and the state has an actual controlling shareholding percentage. It includes enterprises at the same level supervised by the central and local government.

What Are the Classifications of State-owned Enterprises?

At present, state-invested enterprises are mainly divided into two categories: wholly state-owned enterprises and state-funded enterprises.

Wholly state-owned enterprise

The capital of a wholly state-owned enterprise is 100% from the state and the state has an absolute controlling shareholding percentage. For example, State Grid Co., Ltd. is a wholly state-owned enterprise in China.

state grid

State-funded enterprise

Among the state-funded enterprises, only those in which the state has de facto control can be called state-owned enterprises, including absolute those with controlling shareholding percentage and relative controlling shareholding percentage.

The following table can help you understand it better (according to the nine lifelines of equity theory).

No.

The proportion of State contribution

Controlling shareholding percentage

State-owned (Y/N)

1

>50%

Absolute control with veto power in most cases

Yes
2

50%-34%

Relative control with veto power in important cases

Yes
3

30%-10%

Equity participation with no veto power

No
4

<10%

No veto power

No

Therefore, whether a company is a state-owned enterprise or not mainly depends on the ownership structure.

How to Get the Shareholder or Ownership Structure of Enterprises?

You can get the information through National Enterprise Credit Information Publicity System.

1.Please click the link http://www.gsxt.gov.cn/corp-query-homepage.html to enter the home page.

credit system publicity system

2. Input the name of the enterprise. Here take China National Tobacco Corporation ( or “中国烟草总公司”) as an example.

example china tobacco

3. Click the search (or ” 查询”) button.

click the search

4. Click the name of the enterprise.

click the enterprise

5. You can get the basic information about the enterprise. Then find the ownership structure information.

basic information

ownership structure

In this example, the only investor is the State Council, so it is a wholly state-owned enterprise.

You can use Google Translator to help when you have trouble reading the information. Also, if you want to know more about this system, please read this article “Unified Social Credit Code: An Introduction”.

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