I recently reported on the issue of dividend payments by state-owned enterprises , as it had been suggested in the Economist, and elsewhere, that the lack of dividend payments was resulting in excess fixed asset investment by Chinese firms. It now seems that, in a further effort to slow economic growth, dividends will now be demanded. Forbes reports:
“China’s state-owned enterprises are expected to begin paying dividends to the government from 2007, Caijing magazine cited Li Rongrong, director of the State-owned Assets Supervision and Administration as saying.”
It is suggested that the new rules would cover state-owned enterprises, as well as
“companies and financial institutions that have received capital injections from Central Huijin” (the state investment vehicle that has bailed out local banks).
A balancing measure, to soften the blow for those big spenders who may lose out as a result of the new policy, is said to be the introduction of stock options for state-owned enterprises (whatever that may mean in practice).
See news source:
China’s state-owned firms expected to pay dividends to govt from … 
Forbes – USA
BEIJING (XFN-ASIA) – China’s state-owned enterprises are expected to begin paying dividends to the government from 2007, Caijing magazine cited Li Rongrong …