You may not know it. But, the Central SASAC, State-owned Assets Supervision and Administration Commission of the State Council, the People's Republic of China, just initiated a 3-year Performance Assessment Policy that will transform Chinese business practices. This dramatic change may have an equal or greater impact on China than Deng Xiaoping's 1978 reforms.

THE POLICY

The Central SASAC governs a portfolio of 130 companies with $3 trillion in assets, $3 trillion in sales, and 12 million employees. Companies include CNPC (PetroChina), Sinosteel, China Mobile, State Grid, Air China, and almost all large industrial and service companies with state ownership. Other SASACs represent major states and cities and include hundreds of major organisations with tens of billions of assets and millions more employees.