A recent paper that looks at the history of privatisation in China estimates, on the basis of a large nationwide survey, that more than 90,000 firms were sold to the private sector between 1998 and 2005. In terms of value this translates into an estimated $1400bn-worth of assets, which would make China’s privatisation market the largest in the world. Prior to the path of privatisation, China introduced a 'dual-track system', creating markets in parallel to the state’s industrial sector. China also attempted to improve productivity in its state-owned enterprises by increasing their autonomy, offering incentives and specifying targets in terms of profits or taxes in managerial contracts.

Initially it was local authorities (provincial or city governments) that were the principal drivers of the privatisation process, seeking to divest from loss-making state-owned enterprises that were a burden to them. With the approval of the central government in the mid-1990s, the privatisation process took off in the late 1990s. By the end of 2008 there were 154,000 state-owned enterprises in China, which accounted for 3.1% of the total number of enterprises. Although small in terms of numbers, these companies controlled a substantial portion of enterprise assets in China.

Advertisement

According to the paper, the impact of China’s privatisation on firm performance has been mixed. Privatisation has improved performance, but only when it took place through management buy-outs. Other privatisation strategies were not found to have been as effective.

Asia

Mongolia is planning to embark on a new round of privatisations.

Europe

Russia is embarking on a previously announced privatisation programme aimed, among other things, at attracting foreign capital.

Ukraine is moving forward with the sale of 92.79% of the Ukrtelecom shares that are publicly owned.

Kosovo has announced another round of privatisations; the country is also proceeding with the sale of the state-owned telecom company PTK, which is expected to be concluded by the end of this year.

Turkey’s privatisation agency has received 12 bids for the sale of operation rights for the port of Iskenderun; more companies have been slated for sale with a deadline for submitting bids in November 2010.

Serbia is proceeding with the sale of a number of state-owned enterprises as part of its ongoing privatisation process.

Poland has announced new tenders for public companies with deadlines for submitting bids in October and November 2010.

Americas

Brazil has increased its ownership share in Petrobras, in what has been called 'reverse privatisation'.