Most Chinese public records name shareholders, however on occasion records will exclusively list share type. Even when identifying information on shareholders is omitted, it is still possible to extrapolate information about shareholders based on share type. 

Laws governing share issuance, which were originally created to gradually allow private investment in state-owned enterprises (SOEs) and foreign investment into Chinese firms, can be used to extrapolate investor location and shareholder government affiliation when other information is absent.

Identifying Domestic and Overseas Ownership

Chinese enterprises issue three types of shares:

• A-shares – issued on the Shanghai or Shenzhen Exchanges and denominated in RMB
• B-shares – issued on the Shanghai or Shenzhen Exchanges and denominated in foreign currency
• H-shares – issued on the Hong Kong Stock Exchange

Originally, A-shares were only accessible to domestic Chinese investors. Conversely, B-shares and H-shares were created as parallel mechanisms to allow foreign investment in China’s exchanges. The majority of China’s listed shares are A-shares, which represent 3,680 listed enterprises with a market capitalization of over $7.9 trillion as of September 2019 (representing over 90 percent of the market in both respects.)

As of this writing, foreign investors may only purchase A-shares through select programs, with the majority of these shares being held by domestic Chinese investors. Alternatively, B or H shares are most likely to be held by overseas or Hong Kong based investors. This distinction between share types allows a best guess as to the location of a firm’s shareholders.

Estimating Government Ownership  

Among domestic Chinese investors, both private and government shareholders primarily hold A-shares. However, the types of A-shares they hold differ. This is due to A-shares being further broken down into two categories: 

• ‘Non-tradable shares’ (非流通股), known as ‘Restricted sale shares’ (有限售条件股份) prior to 2005
• ‘Tradable shares’ (流通股), known as ‘Unrestricted sale shares’ (无限售流通股) prior to 2005

The majority of non-tradable shares represent state ownership, though there are exceptions. In cases where ownership is not listed, one can typically estimate the proportion of state ownership by observing the amount of non-tradable shares.

Tradable shares exist solely for the purpose of trading on the exchanges, and thus are more likely to be held by private investors. When records show non-tradable shares, said shares reflect the enterprise’s roots as a state-owned enterprise and show the proportion of shares still held by said enterprise’s controlling government entity.