The Local Government in Corporate Restructuring: Case Studies in Fractured Bargaining Relations

Kun-Chin Lin, Shaofeng Chen


Through two illustrative case studies of enterprise reform in Henan Province, we examine the underlying political contentions behind the changing roles of local government in the process of the corporatization and asset restructuring of state-owned enterprises (SOE) starting in the late 1990s. As SOEs lose their ability to meet the multitude of resource demands from central and local officials, they become sites of inter-governmental conflicts that produce a no-win situation for the SOE and fiscal and social uncertainties for those communities trying to exit the socialist economy. Our first case study is Puyang municipal government, which leveraged its regulatory authority to exact heavy side-payments in return for not obstructing the corporatization of Zhongyuan Oilfield; the second case involves Zhengzhou city officials colluding with provincial bureaucrats and the state-appointed managers of the Yutong Bus Company in an insider privatization that effectively circumvented a specific Ministry of Finance prohibition.

Full Text: PDF (English)

Logo von Hamburg University Press und der Staats- und Universitätsbibliothek Hamburg Carl von Ossietzky Logo des GIGA-Institut Logo der Deutschen Forschungsgemeinschaft Logo der Leibniz-Gesellschaft