Geography Reference
In-Depth Information
with registered startup capital of 200 million yuan (approximately U.S.$24 million). At
this time, the shares were split between China Huadian Group (51 percent), Yunnan Devel-
opment Investment Company (20 percent), Yunnan Electricity Group's Hydropower Con-
struction Company (19 percent), and the Yunnan Nu River Electricity Group (10 percent)
(McDonald 2007; Dore and Yu 2004).
This is a common trend in China's state-owned enterprise sector, which views the inter-
national market as a remedy for the chronic capital shortages it faces. The State Council,
through a body called the State-Owned Assets Supervision and Administration Commis-
sion, exercises control over each of the state-owned enterprises, which assures that corpor-
ate governance is kept in line with the state agenda, an exceptionally close and comple-
mentary relationship between government agencies and key corporations (Jia and Tomasic
2009). Moreover, because the ownership structure of these corporations ultimately traces
back to the State Council, lower-level agencies—including the MEP, whose task is to as-
sess the environmental impacts of large-scale projects such as dams—find it difficult to
regulate them effectively.
Like large companies everywhere, the Five Energy Giants constantly face the imperative
to generate short-term shareholder value. For the major publicly traded subsidiary share-
holder corporations, two types of stocks are traded in the market: “A shares,” which are
priced in Chinese yuan and limited to domestic investors, and “B shares,” which are priced
in U.S. dollars and open to both domestic and foreign investors (China Securities Regu-
latory Commission 2011). The State-Owned Assets Supervision and Administration Com-
mission holds a controlling proportion of A shares, which ensures that the operations of the
Five Giants remain in line with the state agenda.
This arrangement satisfies complementary interests between the Chinese government
and foreign investors. From the government's perspective, allowing foreign investment en-
sures a steady supply of capital for key industries, many of which were state-owned en-
terprises that had long faced economic hardship. Statemaking sometimes requires a partial
retreat of the state. For foreign investors, meanwhile, buying a stake in the Five Energy
Giants is tantamount to betting on the continued expansion of the Chinese economy, giv-
en that these corporations hold diverse assets throughout the energy sector, from coal-fired
power plants to solar, wind, and hydropower facilities. This investment is widely seen as a
fairly safe bet because the expansion of energy consumption generally tracks the rate of an-
nual GDP growth, which has hovered in or near double digits for more than three decades.
This complex network of public-private relationships is illustrative of the culture of eco-
nomic liberalism that predominates, somewhat ironically, within the CCP. The rights to
develop water-management infrastructure have been turned over to corporate interests, al-
beit ones in which the government holds a controlling share, while the overall logic and
priorities of water management remain under the direction of the central government. The
NDRC, the State Council, and other government agencies have the ability to approve par-
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