The Yang Qi are owned
directly by essentially on the central level SASAC,
which is the central level SASAC,
which is the caretaker
of the state asset at the center level.
And, in a way,
as I mentioned, this big SOEs or this Yang Qi,
they derive a lot of the power from capabilities or
resources endowed upon them by SASAC, by the government.
They enjoy in many cases pretty privileged
position in certain industries:
for example telecom operations,
for example in oil and gas.
We call it the three Barrel's companies.
"San tong you", Sinopec, PetroChina,
CNOOC and so on.
They have pretty well positioned.
And this is because SASAC own them and
SASAC give them this kind of privileged position.
And so, for foreign companies when they are
dealing with this kind of Yang Qi,
they really need to understand how they operate,
where do they draw the resources and draw the capabilities.
And in some cases,
precursor capabilities are endowed
upon these companies by the government.
When there is a change in the regulation,
in fact it's sometimes very
difficult for this company to adjust to it.
As a result, many of these companies are actually not
necessarily very strong in their innate capabilities
because they rely so much on the
government endowed upon capabilities.
So you know from the
foreign companies standpoint they need to
really fully understand: how do these companies work,
where do they draw on the capabilities, and therefore,
depending on your position,
if they are your competition,
you think about how you deal with them.
If they are your customers,
think about how to serve them better.
And if they're suppliers,
how do you work with them as suppliers.