The biggest auction on earth Before long, hard times again compelled Communist Party Leaders to look to the private sector for salvation. The privatization and reconstitution wave at the end of 1990s saw thousands of medium-sized SOEs disappear and millions of workers lose their jobs. This seems like an embrace of market discipline, but Huang from MIT thinks, it has flaws in two ways. First of all, it was stealthy. Assets sales took place without proper laws and legal frameworks. As a result, there was no guarantee on property right and asset subjects to subsequent state seizure as well as appropriation by insiders. Secondly, leaders remained cautious about market forces. Peripheral privatization is only a strategy to keep political control. Chinese leadership reveals that the purpose of reforms is to “ grasp the large , release the small”: the main purpose is not to increase efficiency at SOEs and benefit customers by competition. On contrary, it is for forming bigger and more dominant national giants controlled by the party. The proof is in the pudding. SASC’s capital base increased from 7100b dollars in 2003 to 21000b in 2009. If taking into account of 150 thousands of SOEs, the number will exceed 100000b. Therefore, if taken seriously, there must be bold , transparent, and long-term efforts, like making thoughtful plans and winding down national shares in areas dominated by the country. If this can take place in phases in the following 10 years, it will give the market enough time to absorb inevitable sell-offs, mergers, and bankruptcies. Successful experience with privatization in these industries around the world belies the Communist Party’ claim that there are too strategic to be left in private hands.