CETC speeds re­form ef­forts

China Daily - - BUSINESS - By MA SI masi@chi­nadaily.com.cn

China Elec­tron­ics Tech­nol­ogy Group Corp, a State-owned tech­nol­ogy gi­ant, will step up ef­forts to op­ti­mize cor­po­rate struc­ture and en­cour­age in­no­va­tion amid the cen­tral gov­ern­ment’s deep­en­ing of Sta­te­owned en­ter­prise re­form.

“Our goal is to lead the de­vel­op­ment of China’s elec­tron­ics in­dus­try and build the cor­ner­stone of na­tional se­cu­rity,” said Xiong Qunli, chair­man of CETC. “We will ramp up re­sources to cul­ti­vate in­no­va­tion and ac­cel­er­ate struc­tural re­form.”

As of Au­gust, the com­pany has suc­cess­fully in­te­grated 19 re­search in­sti­tutes to set up seven units, sim­pli­fy­ing hi­er­ar­chy, boost­ing op­er­a­tional efficiency and sav­ing costs.

CETC has al­ready been work­ing to over­haul its struc­ture, which pre­vi­ously con­sisted of 47 elec­tronic in­for­ma­tion re­search in­sti­tutes. Such a frag­mented struc­ture led to a slate of prob­lems such as scat­tered in­vest­ments, re­dun­dant con­struc­tion and dis­or­dered in­ter­nal com­pe­ti­tion.

“We have shifted our fo­cus to five ar­eas — mil­i­tary elec­tron­ics, civil­ian prod­ucts, in­ter­na­tional man­age­ment, sci­en­tific and tech­no­log­i­cal in­no­va­tion, and as­set man­age- ment and cap­i­tal op­er­a­tion,” Xiong said.

In 2016, CETC recorded 188 bil­lion yuan ($ 28.7 bil­lion) in rev­enue, mark­ing an al­most 20-fold in­crease com­pared to the num­ber in 2002, when it was founded. Its profit also surged to 18.3 bil­lion yuan, high­light­ing the com­pany’s strong mo­men­tum.

The re­form is part of the wider SOE re­forms ad­min­is­tered by the State-owned As­sets Su­per­vi­sion and Ad­min­is­tra­tion Com­mis­sion, the coun­try’s top reg­u­la­tor of SOEs. It is de­signed to in­crease the com­pet­i­tive­ness of SOEs as China works to re­place old growth driv­ers with new ones, with em­pha­sis on in­no­va­tion, tech­nol­ogy and efficiency.

Ac­cord­ing to Xiong, the com­pany also has been closely align­ing busi­nesses with na­tional strate­gies. It has stepped up over­seas in­vest­ments to bet­ter serve coun­tries and re­gions re­lated to the Belt and Road Ini­tia­tive. CETC is also ramp­ing up re­sources to cul­ti­vate in­no­va­tion.

It has set up an in­tel­lec­tual prop­erty cen­ter, in­tended to mo­ti­vate em­ploy­ees to come up with in­no­va­tive ideas and ex­per­i­ment­ing with cut­tingedge tech­nolo­gies. As part of its fi­nan­cial in­cen­tives, the com­pany said at least half of the rev­enue gen­er­ated from new patents will be re­warded to core em­ploy­ees who in­vent the patent.

As a re­sult, the num­ber of patent ap­pli­ca­tions at CETC surged 80 per­cent af­ter the re­form.

“SOEs are the back­bone of na­tional sci­en­tific and tech­no­log­i­cal in­no­va­tion. CETC is en­gaged in in­for­ma­tion tech­nol­ogy, a sec­tor where global R&D spend­ing is pour­ing in to get a dom­i­nant po­si­tion. In­no­va­tion is ex­plod­ing. CETC has done a very good job,” said Xiang Ligang, an in­de­pen­dent expert of the in­for­ma­tion tech­nol­ogy.

The State Coun­cil, China’s Cab­i­net, is­sued an ac­tion plan ear­lier this year, or­der­ing the coun­try’s ma­jor SOEs su­per­vised by the cen­tral gov­ern­ment, ex­clud­ing fi­nan­cial and cul­tural en­ter­prises, to com­plete cor­po­rate re­forms by the end of 2017.


An em­ployee of China Elec­tron­ics Tech­nol­ogy Group Corp checks a bal­loon be­fore its as­cent for an ex­per­i­ment.

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