First, there are serious deviations in the guiding ideology of the overall design of China's capital market. To a great extent, the stock market is not a place to pursue the optimal allocation of resources, but is endowed with other functions such as supporting the reform of state-owned enterprises. The listing qualification of companies is controlled by administrative means such as listing indicators, so that most of them are state-owned enterprises. In order to maintain the dominant position of public ownership, state-owned enterprises adopt the absolute majority of state-owned shares when reforming the company system, and retain the dominant position of higher authorities in the enterprise. Some state-owned holding companies were established by the reorganization of directly affiliated state-owned enterprises by relevant departments, and their administrative functions are difficult to be completely separated. Most of the main responsible persons are concurrently held by government agencies, which is easy to become administrative "flop companies". In terms of management system, many enterprises have not really implemented the modern enterprise system after listing, and the relationship between listed companies and parent companies is actually "one team, two brands". Naturally, listed companies are actually controlled by the parent company, and a monopoly situation is inevitable. Therefore, in terms of ownership structure and governance mechanism, all listed companies in China are conducive to the natural soil for the growth of "one dominant share".
Second, the state-owned holding company is improperly established. State-owned holding companies are different from ordinary operating companies, and the main purpose of their establishment is to separate government from enterprises and maintain and increase the value of state-owned assets. Accordingly, the state-owned holding company should have special requirements in establishing legal person qualification and minimum registered capital, and the holding method and proportion should also be clearly defined. However, China's current company law lacks clear provisions on this. State-owned holding companies are generally confused about their own positioning. In practice, due to different practices and lack of effective supervision system, many state-owned holding companies have actually become tools for local governments or industry departments to intervene and control enterprises. As the largest shareholder, state-owned holding companies often become "monopolists".
Third, a few minority shareholders form a private alliance to form a "major shareholder", thus amplifying their respective interests.