The reform of local state-owned enterprises (SOEs) in China is now under the limelight as the Central Government has started the decentralization exercise. The active promotion by the local governments is well received and the capital market has responded positively, making this a hot topic in the domestic market.

The reform of local state-owned enterprises (SOEs) should not be limited to the revitalization of state-owned assets in the local economy, but the reform should also focus on the realization of "three socialization outcomes".

The evaluation of the efficiency of local state-owned enterprise reform lies in its marketization.

A few years ago, ANBOUND Consulting has proposed “ANBOUND's Vision” for SOEs reform, which is using the approach of mutual fund to reform local SOEs.

In this vision, mutual fund is the most important way to realize the state-owned assets, being the key to realizing the three "socializations", namely socialization of ownership, socialization of corporate governance and socialization of resources.

With the three “socializations”, the governance structure of state-owned enterprises will change tremendously; bringing the actual state-owned enterprise reform.