Mixed own­er­ship re­form ex­panded

China Daily (Hong Kong) - - BUSINESS - By ZHENG XIN zhengxin@chi­nadaily.com.cn

The cen­tral govern­ment has se­lected State-owned en­ter­prises in seven sec­tors to pi­lot mixed own­er­ship re­form, in­clud­ing petroleum, rail­way, avi­a­tion, tele­coms and de­fense, ac­cord­ing to an Eco­nomic In­for­ma­tion Daily re­port.

It is the lat­est move from the au­thor­i­ties to in­vig­o­rate the coun­try’s SOEs.

Ten­ta­tive schemes for the first batch of mixed own­er­ship re­form pi­lots are now un­der de­lib­er­a­tion and await­ing fi­nal ap­proval, with four of the pi­lot projects al­ready ap­proved.

The coun­try’s avi­a­tion and power giants — China Eastern, China Uni­com, China South­ern Power Grid, Harbin Elec­tric Corp, China Nu­clear E&C Group and China State Ship­build­ing Corp — make up the lion’s share of the first batch of pi­lot projects, ac­cord­ing to the Na­tional De­vel­op­ment and Re­form Com­mis­sion and the State-owned As­sets Su­per­vi­sion and Ad­min­is­tra­tion Com­mis­sion.

All of th­ese SOEs are mo­nop­o­lies, said Li Jin, head of the China Equip­ment Man­age­ment In­sti­tute.

“Mixed own­er­ship could help pri­or­i­tize the com­pa­nies’ man­age­ment and en­cour­age prop­erty rights di­ver­si­fi­ca­tion while en­cour­ag­ing more pri­vate cap­i­tal to in­vest in SOEs.”

Mixed own­er­ship will help link th­ese com­pa­nies more closely with their share­hold­ers, and the com­pa­nies will thus act in their own best in­ter­ests, he added.

The cen­tral au­thor­i­ties stressed the sig­nif­i­cance of mixed own­er­ship for SOEs at the re­cent Cen­tral Eco­nomic Work Con­fer­ence, where se­nior of­fi­cials gath­ered to map out pri­or­i­ties for the com­ing year.

Ac­cord­ing to Liu He, deputy head of the NDRC, mixed own­er­ship pi­lots play the role of an ice­breaker in SOE re­form, while urg­ing SOEs to im­prove their man­age­ment through mar­ke­to­ri­ented re­form.

Sec­tors in­clud­ing elec­tric­ity, crude oil, nat­u­ral gas, rail­way, civil avi­a­tion, tele­coms and de­fense should be key ar­eas for re­form, he said.

Sinopec Group is al­ready plan­ning to co­op­er­ate with pri­vate com­pa­nies in sales of re­fined oil.

China Na­tional Petroleum Cor­po­ra­tion also said ear­lier it would al­low pri­vate com­pa­nies to hold a stake in its oil ex­plo­ration busi­nesses.

It said on Wed­nes­day that it had im­ple­mented guide­lines on re­forms for a mar­ket-ori­ented econ­omy and mixed own­er­ship, to help “pri­or­i­tize cap­i­tal and the busi­ness struc­ture while en­sur­ing the main­te­nance and ap­pre­ci­a­tion of Sta­te­owned as­sets”.

CNPC Chair­man Wang Yilin said mixed own­er­ship is a sig­nif­i­cant break­through and will be a ba­sic prin­ci­ple for the com­pany.

Stocks of some SOEs jumped on Thurs­day, with China State Ship­build­ing Corp ris­ing 2.45 per­cent to 29.66 yuan ($4.27) and China Nu­clear E&C Group climb­ing 5.81 per­cent.

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