What is institutional investor’s view about China Corporate Governance risks and State-Owned Entities (SOEs)?
Release Date: 01/03/2021
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info_outlineIn this episode, Lyndsey talks with Vivian Lin, partner and portfolio manager of William Blair’s China A-Shares Growth strategy and a global research analyst covering Chinese equities.
Their conversation starts with understanding the importance of China corporate governance for investor side. And the status of China corporate governance and ESG trend.
They then dive into China corporate governance key risks. Vivian shares how she handles these risks when she invests in China companies from selecting process and due diligence process.
They continue the conversation with China SOEs corporate governance. Vivian explains the different ownership of China SOEs. She reviews the key risk of China SOEs, and the societal contribution SOEs made to China society.
They closed the first part of the conversation by Vivian sharing her experience regarding things global investors do not know but should know about China SOEs. Vivian shares her experience working with China SOEs with professional management team, and her opinion regarding the importance of CEO compensation in China SOE reform.
Conversation Highlights (with timestamps)
- China companies’ corporate governance so important to global investors? (2:30)
- Main CG risks of Chinese CG (7”00)
- Equity share pledge and why it’s so prevalent in China?
- Chinese market constrains – leading business is not market driven
- What’s the break points of investment for China companies?
- Accounting fraud issue of China companies and companies from other market
- Investor due diligence key elements
- Different China state-owned enterprises (SOEs) (12:30)
- Different ownership of SOEs in China
- Central government owns traditional Industry (infrastructure, energy, material) – central government owned
- Provincial, city level SOEs New economy (consumption, service, technology) – with more professional management team
- Specific Risk of China SOEs (17:00)
- Some SOEs might have better CG structure due to government’s duty and intention
- Minority investors influence to SOEs are limited - How to handle it?
- What western investors need to know about China SOEs (23:00)
- Things investors do not like to see
- What good SOEs in China look like with professional management team?
- CEO Compensation in China SOEs – SOEs reform focus
Guest Contact Information
Vivian Lin
Email: [email protected]
Publication:
Vivian’s blog site on William Blair:
https://active.williamblair.com/author/vivian-lin-thurston/
“Sustainable Trends Supporting China A-Shares”
“Three Themes in Emerging Markets”
“China Backdrop: Fundamentally and Technically Positive”