BEIJING ( TheStreet) -- The jury is still debating whether China's latest "state-owned enterprise reform" project is a sincere privatization effort or a ruse aimed at suckering foreign investors.
Undeterred by the debate are Chinese stock analysts who say that, at least for now, there's money to be made by playing publicly traded shares in state companies high on the reform list and their foreign partners.
These include Chinese state-run companies listed on mainland, Hong Kong and U.S. stock exchanges, as well as their U.S., European and Japanese partners, contractors and customers.
An example of a reform candidate on analyst radar screens is SAIC Motor, China's largest auto company whose foreign partners include General Motors (GM), Volkswagen and Iveco. The company is listed in Shanghai but controlled by the Shanghai government. Its nine-member board of directors includes seven Communist Party members.
Big chunks of SAIC and most state companies -- in some cases up to 80% of a company's assets -- could be sold to private investors over the next few years, under the reform framework that the government has been building since last fall.
State companies in defense, power generation and other sectors deemed nationally strategic would remain totally in government hands.
To date, Shenzhen-listed appliance manufacturer Gree Electric and oil giant Sinopec (SHI) have stepped up to the task. Gree's controller, the Zhuhai city government, recently started breaking up the company to prepare the appliance unit for private investors. Sinopec, controlled by the central government, plans to sell its retail gas station unit within a few weeks.
According to a Changjiang Securities report, companies under the Shanghai government's wing such as SAIC and in Guangdong Province such as Gree are likely to lead the reform movement. As more companies join nationwide, the report said, the reform scheme "is bound to become a hot channel for capital investment in 2014."
A big blip on the radar is Walt Disney (DIS) partner Shanghai Media & Entertainment Holding, an umbrella for more than a dozen broadcast, film, theater and real estate companies. One division is currently building Shanghai Disneyland. Its Shanghai-listed subsidiary Oriental Pearl Group owns the radio-TV tower of the same name that dominates Shanghai's downtown skyline.