• The State Council and local governments exercise investor rights on the state's behalf through designated bodies.
• Major actions (asset sales, mergers, capital increase/reduction) require valuation and specific approvals.
• Selling state assets below appraised value or via undisclosed related-party deals is prohibited.
• Senior managers owe duties of loyalty and care and are accountable for losses.
• Related-party transactions face special scrutiny to prevent benefit transfer.
• Periodic audit and review of state-capital performance is mandated.
🏢 Company setup
Enterprise State-Owned Assets Law · Yalla China
中华人民共和国企业国有资产法 / Law on State-Owned Assets of Enterprises
Enacted: 2008-10-28 ✅ Effective: 2009-05-01
📝 Overview
Regulates how the state manages its stakes in state-owned and mixed enterprises, preventing loss of state assets in investment, mergers and disposals.
This is general information only, not legal advice. For your specific case, consult a licensed lawyer.
📜 The law text / key provisions
💬 Practical reading
💬 This is a general reading/opinion for orientation — not the official legal text nor legal advice.
If you deal with a state-owned company, make sure a valuation and formal approvals exist — their absence can void the deal later.
📎 Official source
npc.gov.cn
🕒 Updated: 16 March 2026