ABSTRACT
The situation in the petrochemical industry illustrates the tension between the top-down and bottom-up approach to building world-class enterprises. Sinopec was established in 1983 as a holding company encompassing all the state enterprises involved in the downstream processing part of the petrochemical industry. While formally it might appear that Sinopec controlled all its subordinate enterprises, the firms were independent legal entities responsible for their own financial affairs and a number of the more powerful of these took advantage of the new autonomy ushered in by the reforms to pursue independently their own expansion.
