Call it capitalism with Chinese characteristics. China's first bout of shareholder activism pits a dissident investor against the very state machinery of which it is part.

The outcome of the row will be revealed tomorrow, when minority shareholders vote on China Eastern Airline's proposed stake sale to Singapore Airlines/Temasek. The state-owned parent of rival airline Air China has escalated its campaign to block the deal. China National Aviation Corporation said yesterday that it would bid at least HK$5 per share for the 24 per cent stake if minorities reject the Singaporeans' HK$3.80 offer. This is in spite of the fact that regulators, including its own ultimate owner, have supported the original deal. For minorities, Air China's promised offer is below the current HK$6.92 share price, but does appear to offer a better alternative. In any case, Air China's own experience shows that having a foreign airline on the shareholder register does not guarantee sweeping improvements.