With international investors watching, it will be harder to fall short of targets. Sinopec also is an example. Besides adopting U.S. accounting standards, it is spinning off ancillary operations, including a college and hospitals. In the past, officials declared that shares in anything but banks could be sold because of their critical role in the economy. Now, financial industry sources say China's State Council has given preliminary approval for an IPO by the Bank of China, the country's third-largest.
Independent boards are also on the way.
Thanks to an introduction from underwriter Morgan Stanley Dean Witter, telecom heavyweight Craig O. McCaw has joined the board of mobile operator China Unicom. PetroChina, whose outside directors include Italian oil executive Franco Bernabe, has emulated Western boards and is the first in China to boast a compensation committee, an audit committee, and an environment and safety committee. Huang Yan, president of PetroChina, is one of 363 managers there who had most of his pay tied to a stock incentive program when the company listed in April. But he has options on 1.82 million shares. If there is no appreciation, I get nothing,'' says Huang, who is extending the plan to cover middle managers as well.