Key step in China's SOE reform on the way

The introduction of a "golden share"－a type of preferred share held by the government or a government entity－would allow the State to relinquish its majority shareholding in large national corporations. 'Golden share' plan to let State relinquish its majority stake in large corporations An experimental "golden share" arrangement will play a crucial role in the next stage of the reform of State-owned enterprises, according to informed sources in Beijing. Economists have proposed that under China's SOE reform, the "golden share" should entitle the holder to veto power over key issues such as a revision of the articles of association, another shareholder acquiring shares beyond a set limit, and any attempted takeover or acquisition by another company. To pave the way for the forthcoming change, the new SOE reform guideline would also divide SOEs into "commercially oriented" and "not-for-profit" types, sources said.