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State-owned enterprises (SOEs) are cumbersome beasts at the best of times. Chinese SOEs are more cumbersome than most, and this is not the best of times. The ongoing discussions of a merger between China Shipping and COSCO demonstrate the structural difficulties facing government officials and company executives as they seek to complete the deal. Beijing’s ambition is that the “newly consolidated companies would then be organised as holding companies instead of government agencies, with their primary focus on maximising profitability and getting more private funding such as through IPOs”. But this is easier said than done while both carriers continue to have large numbers of minority investors.

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