The Singapore Temasek Model: Reflections On The Role Of China State-owned Assets Supervision And Administration Commission

The state-owned sector plays a pivotal role in China's overall economy. Hence the efficacy of the state-owned system is of utmost importance to the overall strength of China and the livelihood of the Chinese people. Currently, the body in charge of steering China's state-owned assets supervision and administration system is China State-owned Assets Supervision and Administration Commission ("SASAC") and an important reference model for its policy-making is the Singapore state-owned assets supervision and administration system, as led by Temasek Holdings Pte Ltd ("Temasek"). This thesis focuses on exploring what exactly is the Temasek model, and what insights and experiences can it provide in relation to the role of SASAC.The first chapter of this thesis commences with an overall introduction and preliminary analysis of the Singapore state-owned assets supervision and administration system, including its various institutions, such as Temasek, the Ministry of Finance as Temasek's shareholder, other government owned companies such as Government of Singapore Investment Corporation Pte Ltd and MND Holdings Pte Ltd, the elected President, the Ministry of Trade and Industry and its statutory boards, the Prime Minister's Office and the Corrupt Practices Investigation Bureau. This chapter further concludes with an analysis of the overall entrustment agency process of the Singapore state-owned assets supervision and administration system.Chapter Two further engages in a more in-depth analysis and discussion of Temasek's performance, internal corporate governance structure, and its state-owned enterprise supervision and administration model, including setting out the internal reforms and adjustments undertaken by Temasek in order to overcome a period of low returns. This chapter also analyzes in detail how Temasek, through assembling a team of directors with diverse backgrounds and experience working in the civil service, multinational, state-owned and private companies, seeks to ensure its effective exercise of the investor function and its supervision and administration of state-owned enterprises in accordance with market requirements, thereby achieving an 18% annual rate of return. At the end of this chapter, the essence of the Temasek model is further crystallized into a few major points, such as its resolution of the investor function and a strong emphasis on supervision.Chapter Three begins with a succinct discussion of the historical evolution of China's state-owned assets supervision and administration system and a major review of the various relevant periods, namely, the State-owned Assets Administration Bureau era from 1988 to 1998, the 'divided governance' era from 1998 to 2002 and the SASAC era from 2003 till today. This chapter further explores the significance of the debate over the role of SASAC with reference to the theme of state-owned enterprise efficiency, utilizes the key concept of conflict of interest to sift through the disputes surrounding the role of SASAC and engages in an in-depth exploration of the various problems faced by SASAC in the discharge of its investor function. Undertaking a comparative analysis of Temasek and SASAC, this chapter further explores the potential advantages and avenues for China to establish state-owned holding companies as the investor of state-owned enterprises, and emphasizes the importance of external supervision, including calling for a strengthening of the external supervision of SASAC and the establishment of an agency specifically in charge of monitoring state-owned assets.