The State Council issued a guideline on restructuring and reorganization of State-owned enterprises (SOE) on July 26.
SOEs’ restructuring and reorganization should serve national strategies, respect market rules, combine with reforms, follow laws and regulations, and stick to a coordinated approach, said the guideline.
According to the circular, by 2020, SOEs will have a more accurate strategic position, more logical general structure, and significantly improved efficiency in capital allocation. A group of innovative and competitive SOEs can play a leading position in the world.
The guideline said State-owned capital should support SOEs, whose core businesses are involved in national and economic security and major national programs, to strengthen their operations, and allow non-State-owned capital to play a role while ensuring the State-owned capital’s leading position.
The structure and flow of State-owned capital in SOEs should be optimized through restructuring enterprises invested or operated by State-owned capital and exploring efficient business models, said the circular.
In addition, various platforms should be established to strengthen science and technology research and development, promote innovation cooperation among industries, enhance Internet Plus growth, and support financial innovation.
An international business platform should also be built to strengthen SOEs’ capacity to participate in international market competition, according to the document.
According to the plan, related departments and industries are asked to steadily promote restructuring of enterprises in fields such as equipment manufacturing, construction engineering, electric power, steel and iron, nonferrous metal, shipping, construction materials, tourism and aviation services, to efficiently cut excessive overcapacity and encourage restructuring of State-owned enterprises.
The State Council urged related industries to focus on allocating more resources to major enterprises and dominant enterprises through asset restructuring, equity cooperation, asset swaps and joint development.
In the meantime, the State Council also asked industries to speed up the integration of internal resources of enterprises and carry out mergers and acquisitions, promote the quality of branding by focusing on achieving key technologies and core resources.
The plan asked industries to vigorously cut overcapacity efficiently, with the focus on steel and iron, and coal. At the same time, more efforts are needed in handling enterprises with negative profits and low-efficient production rate.
In addition, the State Council asked related industries to stop the operation of a series of non-dominant businesses with less advantages and competitiveness in the market.
To ensure the implementation of these measures, the plan asked related departments to strengthen organizational leadership and supervision, emphasize instruction on performances, enhance policy support and improve supporting facilities.