What kind of privatization?

The Fifteenth Party Congress of the Chinese Communist Party (CCP) attracted worldwide attention by announcing its adoption of "controlling big while releasing the small strategy in reforming its 354,000 state-owned enterprises (SOEs), 240,000 of which are small-sized SOEs. A shareholding system (gufen zhi) will be a major instrument for SOE reform. This paper first discusses the necessity and urgency of SOE reform, and then focuses on the forms of shareholding systems. Finally, it discusses the problems posed by the expansion of government organs and agencies in recent years and the challenges in presents to China's transition.