Over 20 lo­cal­i­ties set timeta­bles for mixed-own­er­ship re­form

Global Times - Weekend - - TOPNEWS - By Xie Jun and Chu Daye

More than 20 pro­vin­cial re­gions have rolled out their blue­prints for pub­lic sec­tor re­forms in 2017, with mixe­down­er­ship re­form a high­light, me­dia re­ported on Fri­day.

As of Tues­day, 28 pro­vin­cial re­gions have con­vened the two an­nual ses­sions of their leg­isla­tive and po­lit­i­cal con­sul­ta­tive bodies, re­garded as the warm-up for the na­tional “two ses­sions” to be held in early March, said the Bei­jing-based Eco­nomic In­for­ma­tion Daily.

The re­gions, which in­clude Bei­jing, Tian­jin and Shang­hai, have clearly placed deep­en­ing of pub­lic sec­tor re­forms at the top of their agen­das in 2017, with mixed-own­er­ship re­forms act­ing as a wedge, ac­cord­ing to the daily. The pro­vin­cial re­gions have for­mu­lated blue­prints for their re­forms in line with their spe­cific eco­nomic re­quire­ments.

Many prov­inces have pro­posed fur­ther open­ing of sec­tors to pri­vate in­vestors, in­clud­ing util­i­ties, telecom­mu­ni­ca­tions, trans­porta­tion, pe­tro­leum, nat­u­ral gas and mu­nic­i­pal pub­lic ser­vices. These sec­tors have pre­vi­ously been mo­nop­o­lized by State-owned en­ter­prises (SOEs).

Mean­while, some prov­inces have set out clear goals to speed up merg­ers and ac­qui­si­tions among SOEs, and push for­ward ei­ther the over­all list­ing of SOEs or the float­ing of their core busi­nesses.

“Cen­trally ad­min­is­tered SOEs are al­ready on the move, and SOEs at the lo­cal level are also speed­ing up to­ward merg­ers and re­or­ga­ni­za­tions. A wave of mar­ket-ori­ented re­or­ga­ni­za­tions among SOEs is build­ing up mo­men­tum,” Li Jin, head of the China En­ter­prise Re­search In­sti­tute, was quoted by the Eco­nomic In­for­ma­tion Daily as say­ing.

Dong Dengxin, di­rec­tor of the Fi­nance and Se­cu­ri­ties In­sti­tute at Wuhan Univer­sity of Sci­ence and Tech­nol­ogy, said that the re­form of SOEs into mixed-own­er­ship struc­ture mainly has two tar­gets. “One is in­te­grat­ing ex­ist­ing cap­i­tal, such as cut­ting ex­ces­sive in­dus­trial ca­pac­ity. The other is im­prov­ing in­cre­men­tal cap­i­tal, which is in­tro­duc­ing more pri­vate cap­i­tal into ar­eas cur­rently dom­i­nated by gov­ern­ment cap­i­tal.”

“In the past, SOEs and pri­vate com­pa­nies usu­ally didn’t get in each other’s way. In the fu­ture, pri­vate share­hold­ing in SOEs should in­crease. In­dus­tries that were used to be mo­nop­o­lized by SOEs should also be more open to pri­vate com­pa­nies,” Dong told the Global Times.

One good ex­am­ple of mixed-own­er­ship [of both pri­vate and pub­lic cap­i­tal] is the Shang­hai-based SOE Green­land Group, where gov­ern­ment cap­i­tal only plays a sup­port­ing role in the com­pany, Feng Liguo, an ex­pert at the China En­ter­prise Con­fed­er­a­tion, told the Global Times. But he said that ex­am­ples like Green­land are very rare in China.

Dong said that SOE re­form is a long process. “We shouldn’t take things for granted or act with un­due haste. Nei­ther should we ex­pect too much from the re­forms,” he stressed.

There are 1,010 A-share com­pa­nies owned by State-as­sets watch­dogs, lo­cal gov­ern­ments, cen­tral SOEs, lo­cal SOEs, uni­ver­si­ties and col­lec­tive own­er­ship en­ter­prises, ac­count­ing for more than one third of all listed A-share com­pa­nies, ac­cord­ing to the Eco­nomic In­for­ma­tion Daily.

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