The Regulation of Chinese SOEs and Italy
In the past year, the Chinese government has eased restrictions on Chinese companies investing overseas. Italy has become a significant target for investment by large Chinese state owned companies (SOEs), particularly those directly administered by the central government (central SOEs). Under Chinese law, SOEs are subject to special regulatory regime. What does this mean for Italian companies that are targeted for acquisition, before and afterwards? For those Italian companies that have been acquired, in whole or part by a Chinese SOE, it does not appear in the short term that the regulation or transparency of those companies will change significantly, and acculturation to the culture of the new owners will be necessary. In the longer term, the Chinese government may decide that reducing widespread corruption in SOEs will be reduced if government auditors are stationed in SOEs and are dispatched regularly to review the finances of offshore subsidiaries. It seems less likely that Chinese legislation will be amended significantly.
*This publication comes from Susan Finder, "The Regulation of Chinese SOEs and Italy" and is available at http://statecontrolledentities.com/2015/06/21/611/. It is posted with the gracious permission of Susan Finder.