China will continue to deepen the reform of State-owned enterprises and further tighten the grip on SOEs investing overseas to ensure the safety and appreciation of State-owned assets this year.
Xiao Yaqing, chairman of the State-Owned Assets Supervision and Administration Commission, said on March 9 that the government will explore the possibility of integrating assets owned by SOEs in overseas markets this year.
Huang Danhua, vice-chairwoman of the SASAC, said the commission “will also strengthen the supervision of State-owned capital this year by shifting the focus from previously governing SOEs themselves to better managing their assets, to cut resource waste and improve work efficiency”.
To date, 9,112 SOEs operate various businesses in 185 countries and regions. Supported by more than 346,000 local and Chinese employees, they manage over 5 trillion yuan ($723.6 billion) in State assets.
The government pledged to improve SOEs’ revenue in global markets via a number of reform measures this year, including mixed-ownership reform, establishment of asset management companies and diversification of SOE equity.
In the first two months of this year, central SOEs made 168.6 billion yuan in profits, an increase of 29.1 percent year-on-year. Their total revenue reached 3.7 trillion yuan, up by 15.2 percent.
Commission Chairman Xiao stressed that there would be three priorities this year for SOE management and reform: to strengthen State-owned capital supervision, enhance risk control and deepen SOE reform.
SOE reforms in the steel, coal, heavy equipment and thermal power industries are inevitable this year, Xiao said. “The reform will be applied to different SOEs based on their actual situation. We need to make sure that both stakeholder and shareholder can benefit from the reform.”
Fu Chengyu, former Sinopec chairman, said China has entered a critical phase in SOE reform, and thorny issues need to be addressed now.
“Supervision of SOEs and their capital will play a crucial role,” Fu said. “Many SOEs are performing internal reforms but neglecting the critical role of the market in resource allocation.”