Elite Chinese Politics and Political Economy

First, a quick note on what Huijin will do with the money. I finally found the CCB perpectus in the HK Stock Exchange's highly user-UNfriendly website. First, Huijin does not get the money raised by the IPO since the IPO involved the issuance of new shares rather than the sale of existing shares. The money will go to the CCB. Huijin, as the majority share holder, can decide what happpens to the money. It seems that the money will be used to shore up the capital base and presumably to write-off some of the remaining NPLs in the bank.

By State Council rule, holders of state shares at the time of the IPO must give 10% of the receipt from the IPO to the social security fund. Instead of handing over 10% of the money raised from the IPO to the social security fund (which they can't since they are primary shares), Huijin and other holders of the original state shares promise to give CCB dividend equivalent to the 10% of the money raised from the IPO to the social security fund for the next two calendar years.

This has been confirmed by someone close to the deal.