Economic value added adoption in China’s state-owned enterprises

Led by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), the Chinese government has adopted a residual income (RI) index since 2010 when assessing the performance of the 129 state owned enterprises (SOEs) under direct administration of Central Government, known as central SOEs, after a three-year trial.

This study explored how actors interact during the new index adoption process. The actors include SASAC as an agent of state interests and the scheme promoter, and the management of SOEs at both group and business unit level.

The project aims to:

  • establish the evolution of performance measures in  Chinese central SOEs and explore the motives behind 
  • explore the effects of RI adoption on strategic, managerial and operational decision making at both group and business unit level
  • analyse the relationships and the interactions between actors during RI implementation.

A case study approach is used to interview key officials in charge of performance evaluation, the chief financial officers (CFOs) and the business unit managers of four case companies.