Abstract
This paper reviews the experience of SOE reform in several countries - primarily China and also Brazil, Singapore, and S. Korea - and attempts to draw lessons that may be relevant for Vietnam's reform effort. Chief among the lessons are: i) a clear allocation of property rights and low transaction costs involving well-functioning company, contract, and commercial legal arrangements; ii) competitive product markets, including exposure to global competition and technology; iii) relatively open capital markets that allow for FDI and the diversification of SOE ownership; iv) clearly defined expectations concerning the public purpose performed by SOEs; and v) effective transparency and monitoring to determine the extent to which the SOEs are fulfilling their commercial and public goals. Among these factors, an open and competitive market system has been most central for incentivizing focus on restructuring China's SOE sector.