Figure 1
The flow diagram is arranged from top to bottom within dashed boundary boxes showing the governance structure before and after reform. At the top, a dashed box contains the heading “Before the reform: Multi-headed governance structure (“Nine dragons governing the water”)”. On the left side, six rectangular boxes are stacked vertically, labeled “Organization Department”, “Ministry of Personnel”, “State Planning Commission”, “State Economic and Trade Commission”, “Ministry of Finance”, and “Ministry of Labor and Social Security”, followed by “dots”. From each of these boxes, rightward arrows point to a grouped set of functions on the right. On the right side within the same dashed box, a vertical stack of rectangles is headed “Affairs in S O E s”. Below it are rectangles labeled “Executive Appointments”, “Investment Decisions”, “Financial Oversight”, “Wage Policies”, and “dots”. Each left-side department connects via arrows to this right-side stack. The first and second box connects to rectangle “Executive Appointments” and third and fourth box connects to rectangle “Investment Decisions”. Fifth box connects to rectangle “Financial Oversight”, and sixth box connects to rectangle “Wage Policies”. Below this section, a centered label reads “The establishment of S A S A C s” with a downward arrow pointing to the next section. At the bottom, a second dashed box contains the heading “After the reform: Unification of rights and responsibilities”. Inside this box, two parallel structures are shown. On the left, a rectangle labeled “S A S A C s” has a downward arrow pointing to “S O E A (Treatment group)”. On the right, a rectangle labeled “Other departments” has a downward arrow pointing to “S O E B (Control group)”.Governance structure of SOEs before and after the establishment of SASAC