China Matters: Enactment of the Enterprise State-Owned Assets Law
By Paul Hastings Professional
On October 28, 2008, after nearly a decade of legislative decision making, the Standing Committee of the National Peoples Congress (the Standing Committee) promulgated the Enterprise State-Owned Assets Law (the State Assets Law), which will be effective as of May 1, 2009. The State Assets Law is the most comprehensive legal framework to date with respect to the regulation of transfer procedures, management and governmental oversight of state owned assets and equity interests (collectively, SOAE).
Prior to the State Assets Law, policies with respect to SOAE were governed by the Interim Measures for the Transfer of Enterprise State-owned Property Rights, issued in December 2003 (the Interim Measures). While several provisions of the Interim Measures will be superseded by the State Assets Law, other provisions in the Interim Measures that are not addressed by the State Assets Law will remain valid and enforceable. This article summarizes the main provisions of the State Assets Law with respect to the transfer of SOAE and, where appropriate, describes the extent to which the State Assets Law differs from the Interim Measures.