Zhuhai sold 15% of Gree, its state champion, to Hillhouse's fund for ¥41.7bn

Gree Electric was the model of a local-government champion: a 200-worker Zhuhai factory that became the world's largest air-conditioner maker, majority-held by Zhuhai Gree Group on behalf of the city government and run by the formidable Dong Mingzhu. It was also the kind of asset China's 'mixed-ownership reform' agenda targeted — and in April 2019 Zhuhai announced it would transfer a controlling-sized block of Gree Electric shares to outside investors, openly, through a competitive public process.

The auction drew rival consortia. In October 2019 the company disclosed that its controlling shareholder planned to sell to a Zhuhai-based investment firm; by month's end a review board had selected Zhuhai Mingjun, an investment partnership backed by Hillhouse Capital, over a consortium led by Hopu Investment Management. Reuters put the winning bid at 41.7 billion yuan ($5.92 billion) for 15% of the company, cutting Zhuhai Gree Group's holdings from 18.2% to 3.2%.

The design mattered as much as the price. With the state reduced to a 3.2% minority and no shareholder holding control, Gree Electric became one of China's first giant industrial SOEs to operate without an actual controller — management under Dong Mingzhu answered to a dispersed register topped by the Hillhouse vehicle rather than to a city hall.

The experiment survived its first political test: Dong Mingzhu was re-elected chairwoman in 2025, with analysts expecting a renewed focus on air conditioners, and the deal remains the reference case for selling state control in a national champion without listing the state's exit as a loss.

Zhuhai Gree Group's stake fell from 18.2% to 3.2% for ¥41.7bn ($5.92bn); Gree now runs without an actual controller and Dong Mingzhu was re-elected chair in 2025

Zhuhai chose a competitive, transparent transfer rather than a negotiated handover, which fetched a premium and insulated officials from favouritism claims.

Spreading ownership so no party held control traded a revenue asset for governance certainty — management incentives aligned with the market instead of a municipal owner.

Choosing an investor like Hillhouse brought an owner with no competing appliance business, so the state's exit did not create a strategic predator.

Beijing's mixed-ownership agenda gave local governments the political cover to give up control of their best companies rather than their worst.

Selling control is harder and worth more than selling a stake: by leaving no controlling shareholder, Zhuhai turned a treasury asset into a market-governed company.

The transfer completed in December 2019, months before COVID-19 flattened air-conditioner demand and Midea overtook Gree by revenue — stresses the old ownership structure would have politicised. Gree stayed profitable and dividend-paying under the new register, and in 2025 Dong Mingzhu won another term as chair. For China's SOE reform programme, the sale set the template other cities have quietly copied: sell control of the strongest champion, not the weakest laggard.